gallant venture ltd. - singapore exchange · gallant venture ltd is an indonesia focused investment...

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GALLANT VENTURE LTD. 3 HarbourFront Place#16-01 HarbourFront Tower TwoSingapore 099254Tel: (65) 6389 3535 Fax: (65) 6396 7758www.gallantventure.com

TABLE OF CONTENTS

OUR PROFILE 01

OUR CORE BUSINESSES

• AUTOMOTIVE

• UTILITIES

• INDUSTRIAL PARKS

• PROPERTY DEVELOPMENT

• RESORT OPERATIONS

02

LETTER TO SHAREHOLDERS 07

BUSINESS REVIEW 09

FINANCIAL REVIEW 13

FINANCIAL HIGHLIGHTS 15

GROUP STRUCTURE 16

BOARD OF DIRECTORS 20

KEY EXECUTIVES 44

CORPORATE INFORMATION 45

FINANCIAL CONTENTS 46

Gallant Venture Ltd is an Indonesia focused investment holding company headquartered in Singapore. We are an integrated automotive group with coverage across Indonesia and a master planner for industrial parks and resorts in Batam and Bintan.

With vision and perseverance, we have successfully developed Batam

and Bintan into an investment and tourist destination offering integrated

businesses and services such as industrial parks, utilities, property

development and resort operations. Our businesses are well-positioned

to leverage on the strategic alliance between the Singapore and

Indonesia governments and close proximity to Singapore.

Lagoi Bay Development is our latest integrated project with

resorts/hotels, commercial activities and residential plots in Bintan. We

will continue to expand and develop new tourism offerings to bring our

Bintan Resorts to new heights and significantly enhance the business

prospects on the island.

With our automotive arm – PT Indomobil Sukses Internasional Tbk

(“IMAS”), we have deepened our roots into Indonesia and diversified our

portfolio from a single location-focused business to a country-focused

investment holding company.

GALLANT VENTURE LTD Annual Report 2019 01

OUR PROFILE

IMAS is an Indonesia based integrated automotive

group that maximise business throughout the supply

chain from vehicle distribution to after-sales services,

financing, spare parts distribution, automotive

parts/components manufacturing and other related

supporting services.

IMAS manages and distribute well-known

international passenger vehicle brands such as

Nissan, Audi, Suzuki, Volkswagen, KIA and Datsun.

For its commercial vehicle and heavy equipment

include brands such as Hino, Volvo, Renault, Kalmar,

John Deere and Manitou. IMAS has extensive and

well-distributed sales and after sales branch network

to capture higher sales penetration across Indonesia.

Gallant Venture’s Automotive business includes distribution of passenger vehicles, commercial vehicles, heavy equipment, vehicle and equipment financing, supply of spare parts, vehicle servicing and vehicle rental and logistics services.

GALLANT VENTURE LTD Annual Report 201902

AUTOMOTIVE

Our facilities include 18 dual-fired generators at

Batamindo Industrial Park, 3 generators at Bintan

Industrial Estate, and 4 generators at Bintan Resorts.

The installed capacities of the Group’s generators

are 125MW, 10MW, and 24MW respectively.

In order to cope with any potential increase in

electricity consumption and provide steady power

supply to its customers, we cater approximately

30% of our installed capacity as standby reserve.

In addition, we maintain a strategic fuel reserve

so to ensure continuous and uninterrupted power

generation even in the event of disruption in fuel

supply.

Gallant Venture, a private utilities provider in Batam and Bintan, provides electricity, telecommunications, water and waste management services to its Industrial Parks’ and Resorts’ customers. The Group has invested approximately S$435 million in the construction and development of utilities infrastructure and resources including power generation and distribution facilities, portable water treatment facilities, sewage treatment plants and waste water treatment facilities and landfills.


UTILITIES

Our parks encompass net lettable area of

550,000sqm in Batamindo Industrial Park and

100,000sqm in Bintan Industrial Estate. Our

industrial parks are designed with flexible layouts

and ease of set-up. Separate areas are broadly

designed for offices, productions, as well as

loading and unloading of goods. To meet the

needs of investors and tenants, whom may require

specifications unique to their operations in the

factories, the factories may be customised so to

achieve operational efficiency and effectiveness.

Our Batamindo Industrial Park is the first industrial

park in the Asia-Pacific to be certified ISO 9001:2000

and ISO 14001, hallmarks of manufacturing site

that is efficient, cost effective and environmentally

friendly.

Gallant Venture owns and manages Batamindo Industrial Park in Batam and the Bintan Industrial Estate in Bintan. We offer the convenience of one-stop manufacturing environment with ready access to Singapore’s financial, infrastructure and logistics network. Our activities include the development of the industrial parks, lease of prepared industrial land as well as the provision of ready-built factories and dormitory.


INDUSTRIAL PARKS

Located in Northern Bintan, Lagoi Bay Development

is our latest integrated resort project covering

approximately 1,300 hectares of land. It will be

home to resorts, residential sites, shopping malls,

restaurants, entertainment and sea-sport facilities.

Some of the investors in Lagoi Bay include the

world’s leading resorts and hotels marques such as

The Sanchaya, Four Point by Sheraton, Ibis style &

Novotel by Accor Asia Pacific and Dialoog Hotels by

Malka and The Haven.

Over the next few years, it will add over 150

new businesses, approximately 10 new hotel

properties, condominiums and housing compounds,

contributing more than 5,000 room keys to Bintan

Resorts’ current 1,900 key count.

Gallant Venture is the master planner and infrastructure provider in our properties situated in Batam and Bintan. We master planned land parcels for industrial, commercial, residential and resort projects and the Group’s land inventory in Bintan is approximately 18,000 hectares.


PROPERTY DEVELOPMENT

Bintan Resorts continue to be a popular tropical

resort destination with both Singapore residents

and International travellers, famed for its pristine

beaches and gorgeous scenery. With the opening

of new hotels, shopping malls and new attraction

in Lagoi Bay, we have witnessed strong growth in

tourist arrivals especially the China market to Bintan

Resorts. With the new Bintan Resorts International

Airport coming online, it will further enhance

connections with overseas countries and stimulate

tourism growth in Bintan Resorts.

Gallant Venture provides overall support facilities and services to resorts located in within Bintan Resorts. We undertake the overall planning, development, operations and marketing of Bintan Resorts and provide services to the hotels and resorts located within Bintan Resorts that include ferry services and ferry terminal operations, tour operations, property rental, workers’ accommodation, medical support and estate and township maintenance such as road maintenance and drainage as well as operation of a 24-hour crisis centre.


RESORT OPERATIONS

DEAR FELLOW SHAREHOLDERS

The US-China trade war and the Indonesia Presidential

elections have caused great uncertainties to business in

Indonesia. While our revenues rose by around 7%, we are

reporting a loss of $222 million for 2019. Without trying

to minimize this result, we would encourage you to read

this annual report carefully to understand the underlying

conditions of our company rather than been overwhelmed by

this headline numbers. In addition, since both our subsidiaries

PT Indomobil Sukses International Tbk (stock code: IMAS)

and its rental, logistics and financing subsidiary PT Indomobil

Multi Jasa Tbk (stock code: IMJS) are listed on the Indonesian

Stock Exchange – we encourage you to download their

annual reports and analyst coverage reports.

As you read through this annual report, you will see that

a significant portion (over $200 million) of the $222 million

loss derived from non-cash items, including both recurring

(such as depreciation and adjustment due to difference in

accounting standards of our Indonesia subsidiaries) and

one-off adjustment (such as write-down of goodwill). Our

cash and cashflow is still good. Our balance sheet remains

asset rich. We have reduced holding company debt by an

additional 10%. That being said, we do not look lightly at this

significant loss. We are, and continue to be, very pro-active

in managing our businesses efficiently to move to a profit-

making position as soon as possible. Therefore, we would

like to take this opportunity to share with you some of the

highlights we see over the next few years for our company.

AUTOMOTIVE

IMAS has transformed itself over the past years from a

diversified assembler/distributor/vendor of cars into a more

focused two major lines of business: traditional vehicle sales

and service (conducted under IMAS) and other businesses

including financial services, logistics, rental and other

businesses (conducted under IMJS). Some highlights to

look forward to in 2020 include: (1) the addition of Kia to

its passenger car portfolio should add around 4,000 units

of sales through 17 dealerships in 2020, (2) our logistics

company (Seino) is targeted to operate 5,400 trucks (largest

fleet in Indonesia) by the end of 2020 (up from 2,800 today),

and (3) our petrol kiosk business (under the Mobil brand)

Mr Eugene Cho ParkChief Executive Officer Executive Director

Mr Lim Hock SanNon-Executive Chairman Independent Director


LETTER TO SHAREHOLDERS

is expected to achieve 1,500 locations in 2020 on its way

to an ultimate target of 10,000 locations. These last two

businesses are in high growth mode, and their asset heavy

business models may result in higher depreciation expenses

as well as some losses in the initial growth phase. However

we expect significant contributions from both businesses in

the very near future.

UTILITIES

We expect that the demand for electricity, water and

telecommunication services we provide in Bintan and Batam

will have meaningful growth in the coming years starting in

2020 on the back of increasing demand from the existing

resorts in Bintan, new projects in Bintan (eg Obayashi JV),

and the significant growth in customers and demand in our

industrial parks. While we still able to cope with the increased

demand, we are exploring replacing some of the higher

cost production units with lower cost solutions (including

renewables). The cloud on the horizon at the moment of

writing this letter is the effects that the COVID-19 virus may

have on tourism disruption to the supply chains and the

global economy, especially since around 30% of our tourism

visitors in 2019 came from China – although the resorts utility

demand is less than 20% of our total utility business.

INDUSTRIAL PARKS

Our industrial parks business is running well, as both the

Bintan and Batam parks have increased their tenancies

significantly during the course of 2019 – although the full

financial effects will only be seen in 2020. We also have a

significant pipeline of additional demand for factory units

(which we will need to construct) that would increase our

capacity by more than 10%. As these develop over the

course of 2020, we should see continuing growth in our

industrial parks business well into the next 3-5 years.

PROPERTY DEVELOPMENT

Our property development business continues to move forward

as we saw new properties coming online in 2019 (like the

2nd glamping property called Anmon) as well as the Marine

Life Discovery Park (an experiential “swim with the fishes”

aquarium) covering 28,000 square meters. There are another

2,500 rooms currently under development which should keep

us busy through the opening of our new international airport.

Other developments include the Green Agritech Park JV with

Obayashi of Japan, which further develops Bintan as one of the

premier eco-tourism experiential learning destinations in Asia.

RESORT OPERATIONS

We saw around 1.1 million tourist arrivals to Bintan Resorts

in 2019 – another new record number. All things being

equal that trend should continue – however the effects of

the COVID-19 virus on tourism and travel may seriously

affect visitor arrivals in 2020. We have a significant number

of arrivals from China and from the cruise industry – both

of which are being impacted as we write this letter. We will

closely monitor this situation. In response to lower passenger

arrivals in January we have already temporarily reduced ferry

schedules. We will make use of the downtime to improve our

infrastructure – such as the ferry terminal renovation.

As you can see, we have a lot of good projects in the pipeline

and believe the future of our company is strong. We thank

you for your continuing support and we look forward to

providing you with good results in the near future.

Sincerely,

MR LIM HOCK SAN

Non-Executive Chairman

Independent Director

MR EUGENE CHO PARK

Chief Executive Officer

Executive Director


LETTER TO SHAREHOLDERS

The ongoing US-China trade war has resulted in the weakening global economy and disruption to supply chains. Business and consumer confidence were impacted while corporations’ profit margin was weighted down by punitive tariff imposed by USA and China. With this backdrop, many large companies in Asia have started diversifying their manufacturing out of China so to avoid or mitigate punitive tariff imposed by the USA. Throughout 2019, we experienced relocation of manufacturing activities from China to South Asia, and our Industrial Park in Batam and Bintan have benefited from the shift. With introduction of a few major tenants, we are seeing some of the upstream suppliers co-locating their facilities in our Industrial Parks, thus providing a strong factory lease pipeline running into Year 2021. In late 2019, the outbreak of COVID-19 in Wuhan, China, has dampened consumer demand and impacted tourism in South Asia. For Indonesia, despite higher budget deficit in 2019, the economy was performing better than peer countries in the region but Year 2020 outlook remains uncertain as economic impact from the COVID-19 widen. With the re-election of President Joko Widodo for a second term, we see his continuing focus on infrastructure development, spending on social programs and continued push for reform of Indonesia’s sclerotic bureaucracy and regulations. Certain policy changes will have positive impact on Foreign Direct Investments and our Industrial Parks and Resorts segment will benefit tremendously.

The Group reported a net loss of S$222.0 million in FY2019 as compared to FY2018’s S$73.7 million was mainly due to goodwill impairment charge in the automotive segment and higher finance expenses. Excluding the goodwill impairment, the Group’s net loss was S$121.9 million. Furthermore, the Group’s consolidated results for FY2019 excluded S$69.5 million gain on divestment of PT Multistrada Arah Sarana Tbk (“MASA”) and IMAS’ investment properties revaluation gain of

S$28.6 million. The exclusion was mainly due to difference in accounting policies adopted by the Group. Should both gains were taken into the Consolidated Group FY2019’s net loss will be lower than FY2018.

The Group’s revenue has increased by 7% comparing to preceding year. IMAS’ financial services and vehicle rental related business continued to achieve double-digit growth. Sales of passenger cars has picked up with the successful debut of Nissan’s New Livina model. The Group’s Industrial Park occupancy in Batam rose to 92%, the highest in more than a decade while the occupancy in Bintan improved with expansion from new and existing tenants. Our Industrial Park’s lease backlog will run into FY2021. Bintan Resorts hit record high tourist arrivals with China contributed significant part of the growth. For utilities segment, consumption continues to grow in tandem with expansion in both Industrial Parks and Bintan Resorts. With continuing fulfillment of factory lease backlog and opening of new hotels in Bintan, our utilities segment will continue to grow with increasing demand for electricity.

The Group continues to focus on expansion of its industrial park portfolio and work with major investors in completion of new hotels in Bintan. While we crossed Year 2019 with COVID-19 outbreak impacting tourism and consumer sentiment, the Group is well positioned with its diversified portfolio to cope with disruption to the global economy.

AUTOMOTIVEIMAS’s revenue increased from S$1,666.6 million in FY2018 to S$1,792.2 million in FY2019, registered an increase of 8%. Financial services and vehicle rental related business continue double-digit growth of 16% and 25%, respectively. Revenue from passenger vehicle grew by 24% with more


BUSINESS REVIEW

Nissan cars sold during the year due to the successful debut of its new Livina model. Sales of trucks and heavy duty equipment suffered a dip due to uncertainty over government’s future policy on the continual infrastructure spending amidst the presidential election in 2019. The recent partnership with ExxonMobil on mini petrol station business to sell motorcycle spare parts, petrol, diesel and lubricant oil raked in S$128.6 million in revenue. Excluding the MASA’s gain and the revaluation gain on investment properties reported by IMAS and with the goodwill impairment charge, this segment suffered an operating loss of S$69.4 million as compared to a profit of S$33.3 million in FY2018. For the full year, the segment reported a loss of S$169.5 million as compared to FY2018’s loss of S$21.7 million. This segment would have reported a net loss of S$0.8 million if IMAS’s gain from the divestment of MASA, revaluation gain on investment properties and goodwill impairment charges were not adjusted.

The underlying businesses of IMAS remains strong and its integrated business model maximise value throughout the supply chain from vehicle distribution to after-sales service, financing and other related businesses. The Group is confident that this segment will turn profitable and pose for growth as:

(i) Kia Motor, South Korean automaker, has appointed IMAS as its importer and distributor for its passenger cars and commercial vehicles in Indonesia. The new brand will add to IMAS’ dealership portfolio and offer a competitive entry price range to the consumers;

(ii) Raising sales of commercial vehicles from the Indonesia government’s continual spending on infrastructure development under the brands Hino and Volvo trucks which have strong presence in Indonesia;

(iii) Strong cash flows from its car leasing business as IMAS became largest rental company, by fleet size, in Indonesia. Its corporate clients range from banks, Grab and leading FMCG manufacturers;

(iv) Expansion of its higher margin logistic business. IMAS’s key competitive advantage is its large vehicle fleet (target to operate 5,400 trucks by 2020) and well-developed IT based technology attracted reputable FMCG clients such as Indofood, Unilever, Mayora Indah, Indah Kiat pulp and paper products, McDonald’s Indonesia, Nestle, P&G and Pocari Sweat. Indonesia’s economic growth, improving road infrastructure coupled with rapid growth in e-commence sector will fuel significant demand for logistic services;

(v) IMAS’s financing arm, IMFI, has strong track record and extensive experience in financing products, such as vehicle financing, through its distribution network of more than 200 service points and IMAS’s other subsidiaries; and

(vi) The Indonesia 2-Wheelers market will continue to grow and this will have positive impact on IMAS’s mini petrol kiosk business that provides spare part, petrol and lubricant oil.

UTILITIESPower consumption in the industrial parks has expanded in tandem with introduction of new tenants but yet to achieve its peak capacity as many have yet to enter full-scale production in their factories. The Group is confident that once the tenants begin full-scale production, the power consumption will increase significantly. Hike in natural gas price squeezed our profit margin in Batam and the Group is actively seeking alternative fuel sources, including renewable energy, so to diversify from its dependent on natural gas. Power consumption in the Resorts segment increased by approximately 8% due to increase in tourist arrivals and tourism related activities in Bintan. The Group expects new hotels opening and commercial developments in the coming years would provide sustainable growth in the utilities segment. The Group is confident that profitability in this segment will ride along growth in the Industrial Parks and Resorts segment.

INDUSTRIAL PARKSOur industrial park in Batam has performed exceptionally well in 2019 with occupancy rate surpassing 90%, highest occupancy rate in the past decade. With the ongoing trade tension between USA and China, many manufacturers have diversified their productions out of China and co-locate in South East Asia. Several have joined our Industrial Parks to take advantage of our close proximity to Singapore that provides excellent logistic infrastructure. Net expansion of 40,283 sqm in 2019 from new and existing tenants accounted approximately 9% of our total factory space in Batam. With pipeline running into Year 2021, our Batamindo Industrial Park will achieve full occupancy and is embarking construction of new factory units so to fulfill the backlog. For our Bintan Industrial Estate, occupancy has improved with additional of new manufacturing clusters – Offshore Marine and Food processing related businesses. In a move to revitalize our Bintan industrial Estate and shifting the focus from electronics and general manufacturing tenant base, high tech farming/food innovation hub and Bintan Offshore Marine Centre (“BOMC”) were established within the industrial estate. The Group is targeting industrial players in the agriculture and aquaculture high tech farming, AgriTech startups and food manufacturing and processing industries. Our competitive advantages that distinct from other industrial parks are mainly due to availability of well master-planned industrial space, support facilities, portable water and been one of the few Halal certified zone for food processing. Following the success of phase one development, BOMC is undertaking second phase development to set up a world longest spool base facility for fabrication of undersea pipeline designated specifically for offshore oil & gas customers.

Our Bintan Industrial Estate is located in close proximity to the new Bintan Resorts International Airport and Aerospace Park. This has positive impact and beneficial to the growth of our Bintan Industrial Estate. The plan by the Indonesia government to connect Batam and Bintan with a 7km bridge so to boost connectivity in the Riau Islands province so to spur economic growth bodes well for demand of industrial


BUSINESS REVIEW

spaces. Overall, the occupancy and rental rates in our industrial parks have improved and the Group expects the industrial space pipeline remains robust.

PROPERTY DEVELOPMENTThe Group is co-developing new hotels and resorts with investors so to speed up development in Bintan Resorts and increase room inventory. Developing in tandem with the construction of Bintan Resorts International Airport, to be operational by 2023, Bintan Resorts is well position to capture bigger tourist market. The Plaza Lagoi Mall is now fully occupied with new retail stores offering more diverse products and dining options to the consumers. The Group plans to extend the mall connecting hotels in the vicinity so to enhance hotel stay experience in Lagoi Bay.

Updates on property development:–

(a) New Development

Chiva-Som Resort and Wellness Centre, located at the exclusive part of Lagoi. Upon completion, it will house a wellness hotel, wellness centre and luxury villa estates build amidst natural mangroves and overlooking the pristine white sandy beaches. It is scheduled to open in the 3rd quarter of 2022.

(b) New Attraction

Treasure Bay Bintan – Marine Life Discovery Park; The park opened in 4th quarter 2019, spans approximately 2.8 hectares that house more than 70 species and approximately 15,000 fishes. It aims to showcase marine life species in a tropical habitat and enable up-close interaction with marine life in an open, yet safe and controlled environment. The park also exhibits wildlife such as marine birds, mangrove native flora and fauna to facilitate learning and appreciation of the marine wildlife ecosystem.

Treasure Bay Bintan – Organic Farm; The farm provides guided tours and workshops to educate the visitors on the benefits of organic farming and promote farm-to-table dinning and selling herbs native to the Indonesian rainforest.

(c) New Activities

The International Bintan Marathon is the newest addition to the suite of world-class sporting events here, alongside with the Bintan Triathlon and Ironman 70.3 Bintan.

RESORT OPERATIONTourist arrival to Bintan Resorts reached a record high of 1,094,442 for the second straight year with the Chinese visitors contributing substantial part of the growth. Our ferries’ ridership has increased by 6.4% and more than 400,000 passengers had passed through our ferry terminal in Bintan with introduction of port call by international cruise ships. While the Group expects continued growth in tourism segment, the outbreak of COVID-19 in China and fast spreading globally which have significant impact to the tourism industry in near term. China outbound market, which is a substantial growth engine to our tourism business, is expected to drop significantly with the group travel ban imposed by the Chinese Authority. We expect the demand for our ferry services and tourism related services to be severely affected. During this challenging period, the Group will implement measures to cope with the slowdown and to ensure that it is able to resume to full operation once the health and travel alert are lifted.

The Group believes that the COVID-19 outbreak is unlikely to last long and is confident that travel demand will pick up significantly after the crisis. Bintan Resorts remains popular with the local and international travelers and we continue to


develop new products and attractions during this period. There is series of initiatives and developments to promote Bintan as key tourist destination and stimulate growth to the island’s tourist industry:

(i) The Indonesia government’s ongoing initiatives to increase tourist arrivals and designated tourism as one of the main industrial sector for investment. Bintan Resorts is one of the tourist destination identified by the Indonesia government to attract Foreign Direct Investment.

(ii) The new Bintan Resorts International Airport, which is currently under construction, and the upcoming construction of 7km sea bridge linking Batam and Bintan will increase Bintan Resorts’ connectivity and attractiveness as tourist destination. These will be our key pillars to promote Bintan as a “Work, Live and Play” destination.

(iii) The development of Cruise tourism with Genting Dream Cruise offering two-night weekend Bintan Cruise and Royal Caribbean’s Voyager of the Seas making its maiden call at Bintan in May 2019. A scheduled port call by international cruises will boost tourist segment in Bintan and drive growth in tourism related services in the island.

(iv) The Group entered into cooperative agreement with the Obayashi Group to build a Green Agritech Park designed as an eco-tourism destination. This widen the island’s appeal as a tourism destination with wide-ranging experiences for different tourists including

families adventure-seekers, photography enthusiasts, MICE and business travelers, students and more. There will also be a visitor and education centre for tourists and students, promoting agri-technology as part of the park’s drive to become an eco-tourism destination.

GOING FORWARDDespite the COVID-19 crisis and the on-going trade war between the USA and China, the Group will remain vigilant and the Group is confident that it will overcome these challenges by focusing on its strengths and core competencies by implementing strategies to:–

(i) Better working capital management to improve and conserve cash flow;

(ii) Actively manage its cash and debt portfolio;

(iii) Reduce costs and improve productivity and operational efficiency;

(iv) Continue to innovate the industrial parks and drive tourism and investment into Bintan;

(v) Capital investments to improve utilities’ margin that protect the environment;

(vi) Accelerate construction of new factory units so to fulfill increased demand for industrial spaces;

(vii) Expand sustainable and high margin automotive related businesses; and

(viii) Focus on long-term earnings growth and a strong balance sheet.


BUSINESS REVIEW

The Group’s revenue grew by 7% from FY2018’s S$1,832.7

million to S$1,965.7 million in FY2019. Higher revenue was

mainly from automotive, utilities, industrial parks and resort

operation segments. IMAS’s finance companies, passenger

vehicle sales, vehicle rental and distribution of fuel and

lubricant have contributed positively to the Group’s revenue

but trucks and heavy equipment sales remain lower due to

slower infrastructure spending in Indonesia. Higher revenue

from the utilities, industrial parks and resort operation were

mainly due to increased industrial parks’ occupancy rate and

higher tourist arrivals into Bintan.

The Group reported a higher net loss attributable to

shareholders of S$222.0 million as compared to S$73.7

million loss in the previous year and was mainly due to

goodwill impairment charge of S$100.1 million and higher

interest expenses in the automotive segment. Furthermore,

the Group’s consolidated results for FY2019 excluded S$69.5

million gain on divestment of PT Multistrada Arah Sarana Tbk

(“MASA”) and IMAS’ investment properties revaluation gain of

S$28.6 million. Excluding the impairment charge and without

exclusion of one-time gains in IMAS, the Group’s net loss

would be lower than the previous period.

The Group’s EBITDA was S$73.7 million as compared to

2018’s S$181.1 million. Excluding the impairment charge

of S$100.1 million, the EBITDA would be S$173.8 million.

EBITDA contributions from our five business segments were

S$37.9 million (FY2018: S$145.3 million) from Automotive,

S$34.4 million (FY2018: S$38.0 million) from Utilities, S$19.6

million (FY2018: S$20.1 million) from Industrial Parks, -S$11.6

million (FY2018: -S$9.8 million) from Property Development

and S$2.0 million (FY2018: S$2.3 million) from Resort

Operations.

Basic and diluted net loss per share was 4.15 cents per share

for the period under review. The Group’s Net Asset Value

(“NAV”) per share as at 31 December 2019 was 22.98 cents.

AUTOMOTIVEIMAS achieved revenue growth of 8% from S$1,666.6 million

in FY2018 to S$1,792.2 million in FY2019. Revenue growth

was mainly from its passenger vehicle sales, financial services

and vehicle rental related business. New business from

distribution of fuel and lubricant for the 2W market has

contributed positively. While the sales of trucks and heavy

equipment are lagging, financial services and vehicle rental

related business continued to achieve double digit growth.

IMAS’s operating income increased from S$131.0 million

to S$176.3 million including the gain on the divestment of

MASA and revaluation gain on investment properties. For

the full year 2019, IMAS reported a higher net profit of

S$14.3 million as compared to 2018’s net profit of S$9.6

million due to gain on the divestment of MASA and higher

revaluation gain on investment properties. IMAS’s gain of

S$69.5 million on the divestment of MASA and investment

properties’ revaluation gain of S$28.6 million were excluded

from the segment as the Group adopts different accounting

policies on investment in equity and investment properties.

After the segmental adjustments and goodwill impairment

charge of S$100.1 million, the adjusted net loss was S$169.5

million as compared to 2018’s adjusted net loss of S$21.7

million. The Group is confident that the automotive segment

will turn profitable in due course with IMAS’s expanding

brand franchises in passenger and commercial vehicles

coupled with its sustainable growth in its financial services

and vehicle rental related business. IMAS’s trucks and

duty equipment is expected to growth alongside with the

Indonesia government’s continual spending on infrastructure

development.

UTILITIESRevenue increased from S$100.2 million in FY2018 to

S$104.5 million in FY2019. Power consumption from Bintan

Resorts increased by 8% while consumption in the industrial

parks is still lagging behind as new tenants yet to achieve full

production at their facilities. The Group is confident that once

the tenants in the industrial parks begin full-scale production,

the consumption for the power will increase significantly.

Profit declined from S$15.5 million to S$13.4 million and

was mainly due to increase in natural gas price in Batam

but was partially mitigated by higher margin in Bintan. The

Group expects this segment to continue to generate healthy

profit with strong industrial rental pipeline and more hotels

commence operation in Bintan.


FINANCIAL REVIEW

INDUSTRIAL PARKSRevenue increased from S$36.2 million in FY2018 to

S$37.7 million in FY2019. Factory rental and related income

increased as a result of improved occupancy in the industrial

parks but partially offset by lower revenue from the housing

project in Batam. The loss increased marginally from S$10.6

million in FY2018 to S$10.7 million in FY2019. With more

manufacturers co-locating their operations in South East Asia,

the Group expects more manufacturers joining our industrial

parks and will contribute positively to the business. Currently,

our backlog will run into Year 2021.

PROPERTY DEVELOPMENTThe net loss in our Property Development segment increased

by 13% from S$13.9 million in FY2018 to S$15.1 million and

was mainly due to higher operating expenses. Bintan Resorts

remains as one of favourite tourist destination and the Group

is confident that it will continue to attract investments into

Bintan. While the outbreak of COVID-19 has slowed down

tourist traffic, new hotel developments continue and will be

ready to receive tourists after the crisis. The upcoming Bintan

Resorts International Airport will further integrate regional

outbound market to Bintan and accelerate development

growth in this segment.

RESORT OPERATIONSThe number of tourist arrival increased by 3% from 1,063,458

visitors in 2018 to 1,094,442 in 2019. Ferry passenger load

continues to grow in tandem with increased tourist arrivals.

Our ferry services performed well while other tourism related

services have improved. Resort Operations loss increased

from S$4.3 million in FY2018 to FY2019’s S$5.1 million

was mainly due to higher expenses, partially mitigated by

improved profit in our ferry business. Our resort segment will

be affected by the outbreak of COVID-19 but the Group is

confident that Resort Operations will recover once regional

outbound markets lift travel restrictions between countries.


FINANCIAL REVIEW

FY2019 FY2018

INCOME STATEMENTS (IN S$ MILLION)Revenues 1,965.7 1,832.7Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) 73.7 181.1Earnings Before Interest and Tax (EBIT) (61.6) 65.4Earnings After Tax Attributable to Shareholders (222.0) (73.7)

SEGMENTAL REVENUE (IN S$ MILLION)Utilities 104.5 100.2Industrial Parks 37.7 36.2Resorts 31.2 29.7Property Developments 0.1 –Automotives 1,792.2 1,666.6

EBITDA BY SEGMENT (IN S$ MILLION)Utilities 34.4 38.0Industrial Parks 19.6 20.1Resorts 2.0 2.3Property Developments (11.6) (9.8)Automotives 37.9 145.3Corporate (8.6) (14.8)

STATEMENT OF FINANCIAL POSITION (IN S$ MILLION)Cash and Cash Equivalents 230.5 228.9Investment Properties 101.8 182.2Land and Other Inventories 869.8 954.2Trade, Other Receivables and Financing Receivables 2,070.0 1,903.0Total Assets 5,569.0 5,250.3Total Borrowings 3,291.2 2,799.3Shareholders' Equity 1,246.5 1,438.4

CASH FLOW (IN S$ MILLION)Net Cash used in Operating Activities (32.2) (277.6)Net Cash used in Investing Activities (394.8) (230.1)Net Cash generated from Financing Activities 425.2 483.7Net decrease in Cash and Cash equivalents (1.8) (24.0)

FINANCIAL RATIOSCurrent Ratio 1.1 1.1Debt-to-Equity Ratio (Gross Debt) 264.0% 194.6%Debt-to-Equity Ratio (Net Debt) 245.5% 178.7%EBITDA Margin 3.7% 9.9%Return on Equity -17.81% -5.12%Return on Assets -3.99% -1.40%

STOCK INFORMATION (IN S$ EXCEPT AS INDICATED)Stock Price – Year-end 0.12 0.13Market Capitalisation as at 31 December (S$' billion) 0.646 0.710NAV per Share (cents) 22.98 26.95Earnings per Share – basic (cents) (4.153) (1.382)Earnings per Share – diluted (cents) (4.153) (1.382)


FINANCIAL HIGHLIGHTS

SUBSIDIARIES

EntitiesEffective percentage

of ownership Domicile

PT Batamindo Investment Cakrawala 100% Batam

PT Bintan Inti Industrial Estate 100% Bintan

Bintan Resorts International Pte. Ltd. 100% Singapore

PT Buana Megawisatama 100% Jakarta

BU Holdings Pte Ltd 100% Singapore

PT Taman Indah 100% Bintan

PT Surya Bangun Pertiwi 100% Jakarta

Lagoi Dreams Limited 100% British Virgin Islands

Verizon Resorts Limited 100% Malaysia

Batamindo Investment (S) Ltd 100% Singapore

PT Suakajaya Indowahana 100% Jakarta

Win Field Limited 100% British Virgin Islands

Bintan Power Pte. Ltd. 100% Singapore

Golf View Limited 100% Seychelles

Treasure Home Ltd 100% British Virgin Islands

PT Gallant Lagoi Abadi 100% Jakarta

PT Gallant Lagoi Berjaya 100% Jakarta

PT Gallant Lagoi Cemerlang 100% Jakarta

PT Gallant Lagoi Damai 100% Jakarta

PT Gallant Lagoi Elok 100% Jakarta

PT Gallant Lagoi Fenomena 100% Jakarta

PT Gallant Lagoi Gemilang 100% Jakarta

PT Gallant Lagoi Harmoni 100% Jakarta

PT Gallant Lagoi Inti 100% Jakarta

PT Gallant Lagoi Jaya 100% Jakarta

GV Airport Holdings Pte Ltd 100% Singapore

GO Greenhouse Investments Pte Ltd 100% Singapore

PT Batam Bintan Telekomunikasi 95% Batam

Bintan Resort Ferries Private Limited 90.74% Singapore

PT Bintan Resort Cakrawala 86.77% Bintan

PT Batamindo Executive Village 77.50% Batam

PT Indomobil Sukses Internasional Tbk 71.49% Jakarta

PT Auto Euro Indonesia 71.49% Jakarta

PT Central Sole Agency 71.49% Jakarta

PT IMG Bina Trada 71.49% Jakarta

PT Indomobil Trada Nasional 71.49% Jakarta

PT Indomobil Wahana Trada 71.49% Jakarta

PT Multicentral Aryaguna 71.49% Jakarta

PT Wahana Indo Trada 71.49% Tangerang

PT Wahana Prima Trada Tangerang 71.49% Tangerang

PT Wahana Wirawan 71.49% Jakarta

PT Wahana Wirawan Manado 71.49% Manado

PT Wahana Wirawan Palembang 71.49% Palembang

PT Sentra Trada Indostation 71.49% Tangerang

PT Indomobil Sukses Energi 71.49% Jakarta

PT Wahana Wirawan Riau 71.49% Riau


GROUP STRUCTURE

SUBSIDIARIES



PT Indomatsumoto Press & Dies Industries 71.49% Bekasi

PT IMG Sejahtera Langgeng 71.48% Jakarta

PT Indomobil Multi Trada 71.48% Jakarta

PT Indomurayama Press & Dies Industries 71.48% Bekasi

PT Wahana Inti Central Mobilindo 71.48% Jakarta

PT Wahana Inti Selaras 71.48% Jakarta

PT National Assemblers 71.47% Jakarta

PT Wangsa Indra Permana 71.44% Jakarta

PT Garuda Mataram Motor 71.42% Jakarta

PT Indo Swedish Motor Assembly Corporation 70.91% Jakarta

PT Unicor Prima Motor 70.80% Jakarta

PT Indomobil Prima Niaga 70.80% Jakarta

PT Jasa Kencana Utama 70.78% Jakarta

PT Indojaya Tatalestari 70.77% Jakarta

PT Prima Sarana Gemilang 70.77% Jakarta

PT Indobuana Autoraya 68.16% Jakarta

PT Wahana Rejeki Mobilindo Cirebon 67.31% Cirebon

PT Indomobil Finance Indonesia 65.76% Jakarta

PT CSM Corporatama 65.75% Jakarta

PT Duta Indi Jasa 65.75% Jakarta

PT Indomobil Bintan Corpora 65.75% Bintan

PT Kharisma Muda 65.75% Jakarta

PT Wahana Indo Trada Mobilindo 65.75% Jakarta

PT Indomobil Multi Jasa Tbk 65.75% Jakarta

PT Indomobil Edukasi Utama 65.75% Jakarta

PT Indomobil Ekspress Truk 65.75% Jakarta

PT Indomobil Energi Lestari 64.69% Jakarta

PT Indomobil Prima Energi 64.41% Jakarta

PT Rodamas Makmur Motor 64.34% Batam

PT Marvia Multi Trada 57.18% Tangerang

PT Indo Traktor Utama 53.61% Jakarta

PT Indotruck Utama 53.61% Jakarta

PT Wahana Senjaya Jakarta 50.47% Jakarta

PT Seino Indomobil Logistics 49.25% Jakarta

PT Data Arts Experience 46.46% Jakarta

PT Multistrada Agro International 45.43% Jakarta

PT Mitra Jaya Nusa Indah 45.27% Jakarta

PT Sylvaduta Corporation 45.17% Jakarta

PT Meranti Laksana 44.71% Jakarta

PT Meranti Lestari 44.55% Jakarta

PT Kreta Indo Artha 42.89% Jakarta

PT Prima Sarana Mustika 42.89% Jakarta

Teachcast Global Pte Ltd 42.89% Singapore

PT Eka Dharma Jaya Sakti 42.89% Jakarta

PT Indomobil Summit Logistics 39.45% Jakarta

PT Lippo Indorent 39.45% Jakarta


SUBSIDIARIES



PT Wahana Niaga Lombok 39.32% Lombok

PT United Indo Surabaya 36.46% Surabaya

PT Wahana Adidaya Kudus 36.46% Kudus

PT Wahana Inti Nusa Pontianak 36.46% Pontianak

PT Wahana Investasindo Salatiga 36.46% Salatiga

PT Wahana Jaya Indah Jambi 36.46% Jambi

PT Wahana Jaya Tasikmalaya 36.46% Tasikmalaya

PT Wahana Lestari Balikpapan 36.46% Balikpapan

PT Wahana Megahputra Makassar 36.46% Makassar

PT Wahana Persada Jakarta 36.46% Bogor

PT Wahana Sumber Baru Yogya 36.46% Yogyakarta

PT Wahana Sumber Lestari Samarinda 36.46% Samarinda

PT Wahana Sumber Mobil Yogya 36.46% Yogyakarta

PT Wahana Sumber Trada Tangerang 36.46% Tangerang

PT Autobacs Indomobil Indonesia 36.46% Tangerang

PT Furukawa Indomobil Battery Sales 36.46% Karawang

PT Indo Auto Care 36.46% Jakarta

PT Makmur Karsa Mulia 36.45% Jakarta

PT Indomobil Sugiron Energi 36.45% Jakarta

PT Kyokuto Indomobil Distributor Indonesia 36.45% Jakarta

PT Indosentosa Trada 36.10% Bandung

PT Wahana Delta Prima Banjarmasin 36.10% Banjarmasin

PT Wahana Persada Lampung 36.10% Lampung

PT Wahana Sun Hutama Bandung 36.10% Bandung

PT Wahana Sun Motor Semarang 36.10% Semarang

PT Wahana Sun Solo 36.10% Solo

PT Wahana Trans Lestari Medan 36.10% Medan

PT Indomobil Cahaya Prima 36.10% Lombok Barat

PT Indomobil Sumber Baru 35.75% Semarang

PT Indotama Maju Sejahtera 35.75% Jakarta

PT Wahana Sugi Terra 35.75% Jakarta


GROUP STRUCTURE

ASSOCIATES


of ownership DomicileBatamindo Carriers Pte Ltd 36% Singapore

PT Indo Citra Sugiron 35.75% Jakarta

PT Indo Trada Sugiron 35.75% Jakarta

PT Kyokuto Indomobil Manufacturing Indonesia 35.03% Cikampek

PT Indomobil Sompo Japan 34.76% Jakarta

PT Bintan Aviation Investments 33.33% Jakarta

PT Seino Indomobil Logistics Services 33.19% Jakarta

PT Penta Artha Impressi 32.11% Jakarta

PT Car & Cars Indonesia 32.03% Jakarta

PT Soxal Batamindo Industrial Gases 30% Batam

PT Persada Hijau Cemerlang 30% Bintan

PT Persada Hijau Permai 30% Bintan

PT Hino Motors Sales Indonesia 28.60% Jakarta

PT Hino Finance Indonesia 26.30% Jakarta

PT Indo Masa Sentosa 21.45% Jakarta

PT Nissan Motor Distributor Indonesia 17.87% Jakarta

PT Mitsuba Automotive Parts Indonesia 17.87% Purwakarta

PT Shinhan Indo Finance 17.55% Jakarta

PT Sumi Indo Wiring Systems 14.66% Jakarta

PT Karanganyar Indo Auto Systems 14.66% Karanganyar

PT Vantec Indomobil Logistics 14.30% Jakarta


MR LIM HOCK SANNon-Executive Chairman and Independent Director

Date of last election: 30 April 2019Board Committee– Chairman, Audit and Risk Management Committee– Member, Remuneration Committee– Member, Nominating Committee

Mr Lim was appointed as a Non-Executive Chairman and Independent Director on 1 February 2006.

Mr Lim is presently the President and Chief Executive Officer of United Industrial Corporation Limited. He has a Bachelor of Accountancy from the University of Singapore and a Master of Science (Management) from Massachusetts Institute of Technology. Mr Lim also attended the Advanced Management Programme at Harvard Business School. He is a Fellow of The Chartered Institute of Management Accountants (UK) and a Fellow and past President of the Institute of Singapore Chartered Accountants. He is also a recipient of the Singapore Government Meritorious Service Medal, the Public Administration Medal (Gold) and the Public Service Medal.

Current directorship in other companies listed on Singapore stock exchange– United Industrial Corporation Ltd– Indofood Agri Resources Ltd– Interra Resources Ltd– Ascendas Fund Management (S) Ltd

MR EUGENE CHO PARKExecutive Director and Chief Executive Officer

Date of last election: 30 April 2018Board Committee– Nil

Mr Park was appointed as an Executive Director and Chief Executive Director on 1 February 2006.

Responsible for the overall management of the Company, Mr Park is a co-founder of Parallax Capital Management Group. He has also spent more than 15 years as an investment banker with Credit Suisse First Boston in London, Chase Manhattan Asia Ltd in Hong Kong and Banque Paribas in Singapore. He received a Bachelor of Arts (Chemistry) from Princeton University in the United States of America and a Master of Business Administration from INSEAD in France.

MR GIANTO GUNARAExecutive Director


Mr Gunara was appointed as an Executive Director on 8 November 2006.

Mr Gunara is the Executive Director/Group Chief Operating Officer overseeing the Group Operations. He started his career with Haagtechno BV-Den Bosch in Holland as a Management Trainee in 1984 and is currently a Non-Executive Director of QAF Limited. He sits on the Board of Director/Commissioner of several subsidiaries of the Group and in other private enterprises.

He holds a Bachelor in Business Administration degree from Simon Fraser University, Vancouver, Canada.

Current directorship in other company listed on Singapore stock exchange– QAF Limited

MR CHOO KOK KIONGExecutive Director


Mr Choo was appointed as an Executive Director on 30 April 2014.

Mr. Choo is the Executive Director/Group Chief Financial Officer overseeing the Group and its corporate services. He is also appointed as a Group Risk Officer. Prior to joining the company, he held various management positions in the Sembcorp group. He has over 20 years of finance experience, having held the positions of Vice-President of Finance at Sembcorp Parks Management and Sembcorp Parks Holdings Ltd (now known as Sembcorp Development Ltd), Assistant Vice-President of Finance at Sembcorp Industries Ltd and Accounts Manager with Singapore Precision Industries Pte Ltd. Mr Choo was appointed as a non-executive director of QAF Limited.

He holds a Master in Business Administration from the University of Wales (UK)/Manchester Business School (UK). He had also qualifications from Chartered Institute of Management Accountants (CIMA, UK) and Association of Chartered Certified Accountants (ACCA, UK).

Current directorship in other company listed on Singapore stock exchange– QAF Limited


BOARD OF DIRECTORS

MR JUSAK KERTOWIDJOJOExecutive Director


Mr Kertowidjojo was appointed as an executive Director on 30 April 2014.

Mr Kertowidjojo is the President Director of IMAS. Mr Kertowidjojo was first appointed as the Vice President Director II of IMAS in June 2005 and as the President Director and Chief Executive Officer in June 2011. Currently he also serves as a director in a number of IMAS’ subsidiaries. He started his professional career with the IMAS Group in 1982. Mr. Kertowidjojo obtained a Bachelor’s Degree in Economics and Accounting from the Parahyangan University in Bandung in 1982.

MR AXTON SALIMNon-Executive Director


Mr Axton was appointed as a Non-Executive Director on 30 April 2014.

Mr. Axton Salim was first appointed as Director of PT Indofood Sukses Makmur Tbk based on the resolution of the AGM in 2009 and re-elected in 2015 and 2018. He is concurrently Director of PT Indofood CBP Sukses Makmur Tbk, where he heads the Dairy Division; Non-Executive Director of Indofood Agri Resources Ltd; Director of Art Photography Centre Ltd; Commissioner of PT Salim Ivomas Pratama Tbk and PT London Sumatra Indonesia Tbk. He also serves as Global Co-chair of Scaling Up Nutrition (SUN) Business Advisory Group. Mr. Axton started his career in the Indofood Fritolay Makmur as a Brand Manager and was then after appointed as an Assistant CEO of Indofood Sukses Makmur Tbk.

He holds a Bachelor of Science in Business Administration from University of Colorado, USA.

Current directorship in other company listed on Singapore stock exchange– Indofood Agri Resources Ltd

DR TAN CHIN NAMNon-Executive Director


Dr Tan was appointed as a Non-Executive Director on 25 May 2009.

Dr Tan is currently a Senior Adviser of the Salim Group and Chairman of Global Fusion Capital Pte Ltd. He is also a Member of the Centre for Liveable Cities Advisory Board, BankInter Foundation for Innovation (Spain) Board of Trustees, and Eight Inc Advisory Board.

Dr Tan had 33 years of distinguished service in the Singapore Public Service holding various key appointments before completing his term as a Permanent Secretary in 2007. He held various top public leadership positions including as General Manager and Chairman, National Computer Board; Managing Director, Economic Development Board; Chief Executive, Singapore Tourism Board; Permanent Secretary, Ministry of Manpower; Permanent Secretary, Ministry of Information, Communications and the Arts; Chairman, National Library Board; and Chairman, Media Development Authority. He played a leading role in the information technology, economic, tourism, manpower, library, media, arts and creative industries development of Singapore.

Previously, Dr Tan also held various corporate appointments including Chairman, Temasek Management Services Pte Ltd; Chairman, One North Resource Advisory Panel; Senior Adviser, Singbridge Corporate Pte Ltd; Senior Adviser, Zana Capital Pte Ltd, as well as Board Member of Raffles Education Corporation Pte Ltd, PSA International Pte Ltd, Stamford Land Ltd, Yeo Hiap Seng Ltd and Sino-Singapore Guangzhou Knowledge City Investment and Development Co Ltd, and Member of the International Advisory Board, Economic Development Board Rotterdam.

Dr Tan holds degrees in industrial engineering and economics from the University of Newcastle, Australia and an MBA from University of Bradford, UK. He also holds two honorary doctorates degrees awarded by both universities. He attended an Advanced Management Programme at the Harvard Business School and is an Eisenhower Fellow. He was awarded four Public Administration Medals by the Government of Singapore.


MR RIVAIE RACHMANNon-Executive and Independent Director

Date of last election: 30 April 2019

Board Committee

– Chairman, Nominating Committee

– Member, Audit and Risk Management Committee

– Member, Remuneration Committee

Mr Rachman was appointed as an Independent Director on

8 December 2004.

Mr Rachman is presently the Independent Director of Riau

Development Bank and Surya Dumai Palmoil Plantation &

Industry Group in Indonesia. He was also the Vice Governor

of Riau Province from 1994 to 1999, Head of Riau Economic

Planning Board for ten years, Head of Riau Investment

Coordination Board for six years and President Director of

Riau Development Bank from 1965 to 1968.

MR FOO KO HINGNon-Executive and Independent Director

Date of last election: 30 April 2018

Board Committee

– Chairman, Remuneration Committee

– Member, Audit and Risk Management Committee

– Member, Nominating Committee

Mr Foo was appointed as an Independent Director on 8 December 2004.

After leaving Price Waterhouse Coopers in 1986, Mr Foo joined The Hongkong and Shanghai Banking Corporation Limited (“HSBC”) group in the Trust and Fiduciary Business in Singapore. He was later seconded to HSBC Bank Jersey C.I in 1989 and was subsequently promoted to Executive Director, covering fiduciary activities, private banking, compliance and investment functions. He returned to Singapore in 1991 and resumed responsibilities with the HSBC Investment Bank Group for Private Banking and Trust Services as an Executive Director and Head of Business Development. Mr Foo is also a co-founder and Director of Cerealtech Pte Ltd, a food technology company specialising in enzyme application and micro ingredient development for the industrial baking sector. He is also currently the Independent Director and Audit Committee Chairman of Amara Holdings Ltd. He has over 15 years of experience in investment origination, structuring, monitoring and strategic growth assistance, with emphasis on the private equity investment and capital markets. He has previously served on the boards of various companies in various sectors listed on the SGX-ST. He holds a BA Honours Degree in Economics and Accounting from University of Newcastle Upon Tyne, United Kingdom.

Current directorship in other company listed on Singapore stock exchange– Amara Holdings Ltd


BOARD OF DIRECTORS

Eugene Cho Park Lim Hock San Foo Ko Hing

Date of appointment 01 February 2006 01 February 2006 08 December 2004

Date of last re-appointment 30 April 2018 30 April 2019 30 April 2018

Age 60 74 63

Country of principal residence

Singapore Singapore Singapore

The Board’s comments on this appointment (including rationale, selection criteria, and the search and nomination process)

Not applicable as Mr Park is not subject to re-election at the AGM 2019.

Not applicable as Mr Lim is not subject to re-election at the AGM 2019.

Not applicable as Mr Foo is not subject to re-election at the AGM 2019.

Whether appointment is executive, if so, the area of responsibility

Yes, he is responsible for the overall management of the Group.

No, the appointment is non-executive


Job title (e.g. Lead ID, ARMC, Chairman, ARMC Member, etc.)

– Chief Executive Officer – Chairman of ARMC – Member of Remuneration Committee – Member of Nominating Committee

– Chairman of Remuneration Committee – Member of ARMC – Member of Nominating Committee

Professional qualifications Bachelor of Arts (Chemistry) from Princeton University in the United States of America and a Master of Business Administration from INSEAD in France.

Bachelor of Accountancy from the University of Singapore and Master of Science (Management) from Massachusetts Institute of Technology. Mr Lim also attended the Advanced Management Programme at Harvard Business School. He is a Fellow of The Chartered Institute of Management Accountants (UK) and a Fellow and past President of the Institute of Singapore Chartered Accountants.

BA Honours Degree in Economics and Accounting from University of Newcastle Upon Tyne, United Kingdom.

Working experience and occupation(s) during the past 10 years

Mr Park has spent more than 15 years as an investment banker with Credit Suisse First Boston in London, Chase Manhattan Asia Ltd in Hong Kong and Banque Paribas in Singapore.

He has been with the Group since 2006.

Mr Lim has been with the Group since 2006. He is presently the President and Chief Executive Officer of United Industrial Corporation Limited.

Mr Foo has over 15 years of experience in investment origination, structuring, monitoring and strategic growth assistance, with emphasis on the private equity investment and capital markets.

He has been with the Group since 2004.


ADDITIONAL INFORMATION ON DIRECTORS


Shareholding interest in the listed issuer and its subsidiaries

Direct interest of 200,000 shares, 0.0037%

Direct interest of 1,714,000 shares, 0.0316%

Nil

Any relationship (including immediate family relationships) with any existing director, existing executive office, the issuer and/or substantial shareholder of the listed issuer or of any of its principle subsidiaries

None None None

Conflict of interests (including any competing business)

None None None

Undertaking submitted to the listed issuer in the form of Appendix 7.7 (listing Rule 704(7))

Yes Yes Yes

Other Principal Commitments including Directorship

• Past (for the last 5 years) – PT Multistrada Arah

Sarana Tbk

• Present: – Subsidiaries of Gallant

Venture Group – PT Citatah Tbk – PVP XVIII Pte Ltd – Echo Holdings Pte Ltd – GDM Resources Pte

Ltd – Great Resources

Pte Ltd – Xin Yuan Investments

Pte Ltd

• Past (for the last 5 years) – None

• Present: – United Industrial

Corporation Ltd – Singapore Land Limited – Indofood Agri

Resources Ltd – Interra Resources

Limited – Ascendas Funds

Management (S) Limited – Marina Centre Holdings

Pte Ltd – Realty Management

Services (Pte) Ltd – Singapore-Suzhou

Township Development Pte Ltd

– UIC Technologies Pte Ltd

– Aquamarina Hotel Pte Ltd

– Marina Bay Hotel Pte Ltd

– Hotel Marina City Pte Ltd


• Present: – Amara Holdings Ltd – Cerealtech Pte Ltd




The general statutory disclosures of the Directors are as follows:

(a) Whether at any time during the last 10 years, an application or a petition under any bankruptcy law of any jurisdiction was filed against him or against a partnership of which he was a partner at the time when he was a partner or at any time within 2 years from the date he ceased to be a partner?

No No No

(b) Whether at any time during the last 10 years, an application or a petition under any law of any jurisdiction was filed against an entity (not being a partnership) of which he was a director or an equivalent person or a key executive, at the time when he was a director or an equivalent person or a key executive of that entity or at any time within 2 years from the date he ceased to be a director or an equivalent person or a key executive of that entity, for the winding up or dissolution of that entity or, where that entity is the trustee of a business trust, that business trust, on the ground of insolvency?

No No No




(c) Whether he has ever been convicted of any offence, in Singapore or elsewhere, involving fraud or dishonesty which is punishable with imprisonment, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such purpose?

No No No

(d) Whether there is any unsatisfied judgement against him?

No No No

(e) Whether he has ever been convicted of any offence, in Singapore or elsewhere, involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such breach?

No No No





(f) Whether at any time during the last 10 years, judgement has been entered against him in any civil proceedings in Singapore or elsewhere involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, or he has been the subject of any civil proceedings (including any pending civil proceedings of which he is aware) involving an allegation of fraud, misrepresentation or dishonesty on his part?

No No No

(g) Whether he has ever been disqualified from acting as a director or an equivalent person of any entity (including the trustee of a business trust), or from taking part directly or indirectly in the management of any entity or business trust?

No No No

(h) Whether he has ever been convicted in Singapore or elsewhere of any offence in connection with the formation or management of any entity or business trust?

No No No




(i) Whether he has ever been the subject of any order, judgement or ruling of any court, tribunal or governmental body, permanently or temporarily enjoining him from engaging in any type of business practice or activity?

No No No

(j) Whether he has ever, to his knowledge, been concerned with the management or conduct, in Singapore or elsewhere, of the affairs of:

i. any corporation which has been investigated for a breach of any law or regulatory requirement governing corporations in Singapore or elsewhere; or

No No No

ii. any entity (not being a corporation) which has been investigated for a breach of any law or regulatory requirement governing such entities in Singapore or elsewhere; or

No No No

iii. any business trust which has been investigated for a breach of any law or regulatory requirement governing such entities in Singapore or elsewhere; or

No No No





iv. any entity or business trust which has been investigated for a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, in connection with any matter occurring or arising during that period when he was so concerned with the entity or business trust?

No No No

(k) Whether he has been the subject of any current or past investigation or disciplinary proceedings, or has been reprimanded or issued any warning, by the Monetary Authority of Singapore or any other regulatory authority, exchange, professional body or government agency, whether in Singapore or elsewhere?

No No No

Disclosure applicable to the appointment of Director only

Any prior experience as a director of a listed company?

Not applicable Not applicable Not applicable

Attended or will be attending training on the roles and responsibilities of a director of a listed issuer as prescribed by the Exchange?


Please provide details of relevant experience and the nominating committee’s reasons for not requiring the director to undergo training as prescribed by the Exchange (if applicable).



Dr Tan Chin Nam Axton Salim Rivaie Rachman

Date of appointment 25 May 2009 30 April 2014 08 December 2004


Age 70 41 86


Singapore Indonesia Indonesia


Not applicable as Dr Tan is not subject to re-election at the AGM 2019.

Not applicable as Mr Axton is not subject to re-election at the AGM 2019.

Not applicable as Mr Rachman is not subject to re-election at the AGM 2019.






– Nil – Nil – Chairman of Nominating Committee

– Member of ARMC – Member of Remuneration

Committee

Professional qualifications Degrees in industrial engineering and economics from the University of Newcastle, Australia and an MBA from University of Bradford, UK. He also holds two honorary doctorate degrees awarded by both universities. He attended an Advanced Management Programme at Harvard Business School and is an Eisenhower Fellow.

Bachelor of Science in Business Administration from University of Colorado, USA.


Dr Tan had 33 years of distinguished service in Singapore Public Service holding various key appointments before completing his term as a Permanent Secretary in 2007.

He is Senior Adviser of the Salim Group. He is also Adviser of Eight Inc. as well as Member of the Centre for Liveable Cities Advisory Board and the Bankinter Foundation for Innovation (Spain) Board of Trustees.Advisory Board and member of Singapore Symphony Council.

Mr Axton serves as Global Co-chair of Scaling Up Nutrition (SUN) Business Advisory Group.

Mr Rachman is presently the Independent Director of Riau Development Bank and Surya Dumai Palmoil Plantation & Industry Group in Indonesia. He was the Head of several Riau Government board for over 20 years.





Nil Nil Nil


None Son of Mr Anthoni Salim who is a substantial shareholder of the Company.

None


None None None


Yes Yes Yes


• Past (for the last 5 years) – Yeo Hiap Seng Ltd – Raffles Education

Corporation Ltd – Singapore Symphony

Council – Stamford Land

Corporation Ltd – Temasek Management

Services Pte Ltd – PSA International Pte

Ltd – Zana Capital Pte Ltd – Singbridge Corporate

Pte Ltd – Litmus Group Pte Ltd – Sino-Singapore

Guangzhou Knowledge City Investment and Development, Co. Ltd

• Present:– Global Fusion Capital

Pte Ltd


• Present:– Indofood Agri

Resources Ltd – Art Photography Centre

Ltd – Several private

enterprises in Indonesia

• Past (for the last 5 years)– None

• Present:– Riau Development

Bank and Surya Dumai Palmoil Plantation & Industry Group in Indonesia.





No No No


No No No






No No No


No No No


No No No





No No No



No No No


No No No


No No No





No No No


No No No










Choo Kok Kiong Gianto Gunara Jusak Kertowidjojo

Date of appointment 30 April 2014 08 November 2006 30 April 2014


Age 51 57 63


Singapore Singapore Indonesia


The re-election of Mr Choo as a Director of the Company at the AGM 2019 was recommended by the Nominating Committee and approved by the Board, after taking into consideration Mr Choo’s contributions, qualifications, expertise and past experiences.

The re-election of Mr Gunara as a Director of the Company at the AGM 2019 was recommended by the Nominating Committee and approved by the Board, after taking into consideration Mr Gunara’s contributions, qualifications, expertise and past experiences.

The re-election of Mr Kertowidjojo as a Director of the Company at the AGM 2019 was recommended by the Nominating Committee and approved by the Board, after taking into consideration Mr Kertowidjojo’s contributions, qualifications, expertise and past experiences.


Yes, he is responsible to overseeing the Group and its corporate services.

Yes, he is responsible to overseeing the Group Operations.

Yes, he is responsible for the overall management of IMAS Group.


– Chief Financial Officer/Chief Risk Officer

– Chief Operating Officer – Executive Director

Professional qualifications Master in Business Administration from the University of Wales (UK)/Manchester Business School (UK). He also had qualifications from Chartered Institute of Management Accountants (CIMA, UK) and Association of Chartered Certified Accountants (ACCA, UK).

Bachelor in Business Administration degree from Simon Fraser University, Vancouver, Canada.

Bachelor’s Degree in Economics and Accounting from the Parahyangan University in Bandung, Indonesia.


Mr Choo has over 20 years of finance experience, he has been the Vice-President of Finance at Sembcorp Parks Management and Sembcorp Development Ltd.

He is a Non-Executive Director of QAF Limited since 2014.

He has been with the Group since 2006. He also sits on the Board of Director/Commissioner of several subsidiaries of the Group and in other private enterprises.

Mr Gunara is a Non-Executive Director of QAF Limited since 2014.

He was the Vice President Director II of IMAS in June 2005 and as the President Director and Chief Executive Officer in June 2011. He also serves as a director in a number of IMAS’ subsidiaries.

Mr Kertowidjojo has been with IMAS Group since 1982.




Nil Direct interest of 200,000 shares, 0.0037%

Nil


None None None


None None None


Yes Yes Yes


• Past (for the last 5 years) – S&P 1821 Pte Ltd

• Present:– QAF Limited – Subsidiaries of Gallant

Venture Group – Batamindo Carriers Pte

Ltd – Nirwana Pte Ltd – Singapore-Bintan

Resort Holdings Pte Ltd – Straits-CM Village Hotel

Pte Ltd – Straits-KMP Resort

Development Pte Ltd – Teachcast Global Pte

Ltd

• Past (for the last 5 years) – S&P 1821 Pte Ltd – Big Venture Pte Ltd

• Present:– QAF Limited – Subsidiaries of Gallant

Venture Group – Avonian Pte Ltd – Nirwana Pte Ltd – Sembcorp Parks

Management Pte Ltd – Singapore-Bintan

Resort Holdings Pte Ltd – Straits-CM Village Hotel

Pte Ltd – Straits-KMP Resort

Development Pte Ltd – Tropical Bintan Pte Ltd

• Past (for the last 5 years)– None

• Present: – Subsidiaries of IMAS

Group – Several private

enterprises in Indonesia






No No No


No No No





No No No


No No No


No No No






No No No



No No No


No No No


No No No






No No No


No No No



Not applicable This is a re-election

of a director.

Not applicable This is a re-election of a

director.

Not applicable This is a re-election

of a director.






Certain information on the business and working experience of the Group’s key executives is set out below:

MR EUGENE CHO PARK

Responsible for the overall management of the Company,

Mr Park is a co-founder of Parallax Capital Management

Group. He has also spent more than 15 years as an

investment banker with Credit Suisse First Boston in London,

Chase Manhattan Asia Ltd in Hong Kong and Banque Paribas

in Singapore. He received a Bachelor of Arts (Chemistry)

from Princeton University in the United State of America and

a Master of Business Administration from INSEAD in France.

MR GIANTO GUNARA

Mr Gunara is the Executive Director/Group Chief Operating

Officer overseeing the Group Operations. He started his career

with Haagtechno BV-Den Bosch in Holland as a Management

Trainee in 1984 and is currently a Non-Executive Director of

QAF Limited. He sits on the Board of Director/Commissioner

of several subsidiaries of the Group and in other private

enterprises. He holds a Bachelor in Business Administration

degree from Simon Fraser University, Vancouver, Canada.

MR JUSAK KERTOWIDJOJO

Mr Kertowidjojo is the President Director of IMAS.

Mr Kertowidjojo was first appointed as the Vice President

Director II of IMAS in June 2005 and as the President Director

and Chief Executive Officer in June 2011. Currently he also

serves as a director in a number of IMAS’ subsidiaries. He

started his professional career with the IMAS Group in 1982.

Mr. Kertowidjojo obtained a Bachelor’s Degree in Economics

and Accounting from the Parahyangan University in Bandung

in 1982.

MR CHOO KOK KIONG

Mr. Choo is the Executive Director/Group Chief Financial

Officer overseeing the Group and its corporate services. He

is also appointed as a Group Risk Officer. Prior to joining

the company, he held various management positions in the

Sembcorp group. He has over 20 years of finance experience,

having held the positions of Vice-President of Finance at

Sembcorp Parks Management and Sembcorp Parks Holdings

Ltd (now known as Sembcorp Development Ltd), Assistant

Vice-President of Finance at Sembcorp Industries Ltd and

Accounts Manager with Singapore Precision Industries Pte

Ltd. Mr Choo was appointed as a non-executive director of

QAF Limited. He holds a Master in Business Administration

from the University of Wales (UK)/Manchester Business

School (UK). He had also qualifications from Chartered

Institute of Management Accountants (CIMA, UK) and

Association of Chartered Certified Accountants (ACCA, UK).


KEY EXECUTIVES

COMPANY REGISTRATION NUMBER

200303179Z

REGISTERED OFFICE

3 HarbourFront Place

#16-01 HarbourFront Tower Two

Singapore 099254

DIRECTORS

LIM HOCK SAN

(Non-Executive Chairman and Independent Director)

EUGENE CHO PARK

(Executive Director and Chief Executive Officer)

GIANTO GUNARA

(Executive Director)

JUSAK KERTOWIDJOJO


CHOO KOK KIONG


DR TAN CHIN NAM

(Non-Executive Director)

AXTON SALIM

(Non-Executive Director)

FOO KO HING

(Non-Executive and Independent Director)

RIVAIE RACHMAN

(Non-Executive and Independent Director)

AUDIT AND RISK MANAGEMENT COMMITTEE

LIM HOCK SAN (Chairman)

FOO KO HING

RIVAIE RACHMAN

NOMINATING COMMITTEE

RIVAIE RACHMAN (Chairman)

LIM HOCK SAN

FOO KO HING

REMUNERATION COMMITTEE

FOO KO HING (Chairman)

LIM HOCK SAN

RIVAIE RACHMAN

COMPANY SECRETARY

CHOO KOK KIONG

SHARE REGISTRAR

KCK CorpServe Pte. Ltd.

333 North Bridge Road #08-00

KH KEA Building

Singapore 188721

PRINCIPAL BANKERS

United Overseas Bank Limited

Standard Chartered Bank Ltd

PT Bank Mandiri (Persero) Tbk, Singapore Branch

PT Bank CIMB Niaga Tbk

DBS Bank Ltd

INDEPENDENT AUDITOR

Foo Kon Tan LLP

Public Accountants and Chartered Accountants

24 Raffles Place #07-03

Clifford Centre

Singapore 048621

Partner-in-charge: HO TEIK TIONG

(Since financial year ended 31 December 2018)


CORPORATE INFORMATION

FINANCIAL CONTENTSSTATEMENT OF CORPORATE GOVERNANCE 47

DIRECTORS’ STATEMENT 66

INDEPENDENT AUDITOR’S REPORT 70

STATEMENTS OF FINANCIAL POSITION 77

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 78

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 79

CONSOLIDATED STATEMENT OF CASH FLOWS 81

NOTES TO THE FINANCIAL STATEMENTS 86

STATISTICS OF SHAREHOLDINGS 207


The Board of Directors of Gallant Venture Ltd. (the “Company”), is committed to high standards of corporate governance

and has adopted the corporate governance practices contained in the 2018 Code of Corporate Governance (“Code”) so

as to ensure greater transparency and protection of shareholders’ interests. This statement outlines the key aspects of the

Company’s corporate governance practices that were in place throughout the financial year.

The Company has complied in all material aspects with the principles and provisions of the Code. Where there are deviations

from the Code, the explanations are provided in the relevant sections of this report.

BOARD MATTERS

PRINCIPLE 1: THE BOARD’S CONDUCT OF AFFAIRS

The company is headed by an effective Board which is collectively responsible and works with Management for the long-term

success of the company.

Board’s Role

The primary role of the Board is to protect and enhance long-term shareholders’ value. It sets the corporate strategies of the

Group and to ensure that the necessary financial and human resources are in place for the Company to meet its objectives. The

Board establishes a framework of prudent and effective controls which enables risks to be assessed and managed, including

safeguarding of shareholders’ interests and the company’s assets, supervises the Management and monitors performance

of these goals to enhance shareholders’ value. The Board is responsible for the overall corporate governance of the Group

and considers sustainability issues of policies and procedures.

Directors’ Duties and Responsibilities

The Board exercises due diligence and independent judgment in dealing with the business affairs of the Group and works

with the Management to take objective decisions as fiduciaries in the interest of the Group.

The Board puts in place a code of conduct and ethics, sets appropriate tone-from-the-top and desired organisational culture,

and ensures proper accountability within the company. Directors who are in a conflict-of-interest position on certain issues

recuse themselves from discussions and decisions involving the issues.

Delegation of Authority to Board Committees

The Board has formed Board Committees namely, the Audit and Risk Management Committee (“ARMC”), the Nominating

Committee (“NC”) and the Remuneration Committee (“RC”) to assist in carrying out and discharging its duties and

responsibilities efficiently and effectively.

These Committees function within clearly defined terms of references and operating procedures, including procedures for

dealing with conflicts of interest. A Board Committee member is required to disclose his interest and recuse himself from

discussions and decisions involving a conflict of interest. The terms of references are reviewed on a regular basis. The

effectiveness of each Committee is also constantly reviewed by the Board. The sections of this statement under Principles 4

to 10 detailed the activities of the ARMC. NC and RC respectively.

STATEMENT OF CORPORATE GOVERNANCEFINANCIAL YEAR ENDED 31 DECEMBER 2019

GALLANT VENTURE LTDAnnual Report 2019 47

Meetings of Board and Board Committees

Regular meetings are held to deliberate the strategic policies of the Company including significant acquisitions and disposals,

review and approve annual budgets, review the performance of the business and approve the public release of periodic

financial results.

The Company’s Constitution permits Board meetings to be conducted by way of telephonic or video conference meetings,

provided the requisite quorum of majority of the directors is present.

The attendance and participation of the Directors at Board and Committee meetings and the Company’s Annual General

Meeting in April 2019 is set out below:

Board ARMC NC RC AGM

Number of meetings held in FY2019 4 4 1 1 1

Name of Directors Number of meetings attended

Mr Lim Hock San 4 4 1 1 1

Mr Foo Ko Hing 4 4 1 1 1

Mr Rivaie Rachman 4 4 1 1 1

Mr Eugene Cho Park 4 4* – – 1

Mr Choo Kok Kiong 4 4* 1* 1* 1

Mr Gianto Gunara 4 4* – – 1

Dr Tan Chin Nam 4 4* – – 1

Mr Axton Salim 3 3* – – 1

Mr Jusak Kertowidjojo 2 2* – – 1

* Attended the meeting as invitee

Matters reserved for Board’s Approval

The Board has adopted internal guidelines on the matters reserved for the Board’s decision; and clear directions to

Management on matters that must be approved by the Board.

Matters specifically reserved to the Board for its approval are:

(a) matters involving a conflict of interest for a substantial shareholder or a director;

(b) strategic policies of the Group;

(c) annual budgets

(d) material acquisitions and disposal of assets;

(e) corporate or financial restructuring;

(f) share issuances, interim dividends and other returns to shareholders; and

(g) any investment or expenditure which requires Board’s approval as set out in the Company’s authorization matrix

which sets out the financial authority and approval guidelines for capital expenditure, investments, divestments and

borrowings.


GALLANT VENTURE LTDAnnual Report 201948

Orientation, briefings, updates and trainings for Directors

New directors joining the Board will be issued formal letters of appointment setting out his duties and obligations. They will be

briefed by the Chairman on their duties and obligations and introduced to the Group’s business and governance practice and

arrangements, in particular the Company’s policies relating to the disclosure of interests in securities, disclosure of conflicts

of interest in transactions involving the Company, prohibition on dealings in the Company’s securities and restrictions on

disclosure of price-sensitive and trade-sensitive information.

New directors will meet up with senior management and the Company Secretary to familiarize himself with his roles,

organisation structure and business practices. This will enable him to get acquainted with senior management and the

Company Secretary thereby facilitating board interaction and independent access to senior management and the Company

Secretary.

The NC is charged with reviewing the training and professional development of the directors. All directors are provided with

regular updates on the corporate governance, financial, legal and regulatory requirements. The NC will recommend appropriate

trainings and seminars and arrange for training by professional bodies funded by the Company as it deems relevant to improve

the performance of the individual director and the whole Board. All directors are encouraged to attend the trainings and

seminars arranged by the Company to stay abreast of the relevant changes.

During the financial year reported on, the Directors had received updates on regulatory changes to the Listing Rules, accounting

standards and Companies Act. The Chief Executive Officer updates the Board at each Board meeting on business and strategic

developments. The management highlights the salient operating issues as well as the risk management considerations for

the Group’s businesses.

Board’s Access to Information

All Directors are from time to time furnished with information concerning the Company to enable them to be fully cognisant of

the decisions and actions of the Company’s executive management. The Board has unrestricted access to the Company’s

records and information.

The Board meet at least quarterly in a year and are provided Board papers comprising quarterly financial reports, budgets,

forecasts with explanations for material variances, and relevant reports relating to the business for discussion timely at each

Board meeting. Senior members of management provide information whenever necessary in the form of briefings to the

Directors or formal presentations in attendance at Board meetings, or by external consultants engaged on specific projects.

Board’s Access to Management, Company Secretary and External Advisers

The Board has separate and independent access to the Company Secretary, the Management or other senior management

executives of the Company and of the Group at all times in carrying out their duties. The Company Secretary attends all

Board meetings and meetings of the Committees of the Company and ensures that Board procedures are followed and that

applicable rules and regulations are complied with. The minutes of all Board Committees’ meetings are circulated to the Board.

The appointment and removal of the Company Secretary is subject to the approval of the Board.

The Board takes independent professional advice, when necessary, at the Company’s expense, concerning any aspect of

the Group’s operations or undertakings in order to discharge its responsibilities effectively.



PRINCIPLE 2: BOARD COMPOSITION AND GUIDANCE

The Board has an appropriate level of independence and diversity of thought and background in its composition to enable it

to make decisions in the best interests of the company.

As at the date of this Report, the Board of Directors (the “Board”) comprises nine members, of whom two are Non-Executive

and Non-Independent and three are Non-Executive and Independent Directors. The Independent Directors make up one-third

of the Board. The majority of the Board comprises Non-Executive Directors.

1. Mr Lim Hock San Non-Executive Chairman and Independent Director

2. Mr Eugene Cho Park Executive Director and Chief Executive Officer

3. Mr Gianto Gunara Executive Director

4. Mr Jusak Kertowidjojo Executive Director

5. Mr Choo Kok Kiong Executive Director

6. Dr Tan Chin Nam Non-Executive Director

7. Mr Axton Salim Non-Executive Director

8. Mr Foo Ko Hing Non-Executive and Independent Director

9. Mr Rivaie Rachman Non-Executive and Independent Director

The criterion for independence is based on the definition given in the Code and the Listing Rules of the Singapore Exchange

Securities Trading Limited (“Listing Rules”). The Code has defined an “Independent” Director as one as one who is independent

in conduct, character and judgement and who has no relationship with the Company, its related corporations, its substantial

shareholders or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director’s

independent business judgment in the best interests of the Company. Under the Listing Rules, an independent director is not

one who is or has been employed by the Company or any of its related corporations for the current or any of the past three

financial years; or not one who has an immediate family member who is, or has been in any of the past three financial years,

employed by the Company or any of its related corporations and whose remuneration is determined by the RC.

Annual Review of Directors’ Independence in 2019

The independence of each Director is reviewed annually by the Nominating Committee, based on the definition of independence

as stated in the Code and the Listing Rules.

All the Independent Directors, Mr Lim Hock San, Mr Foo Ko Hing and Mr Rivaie Rachman have confirmed their independence

and they do not have any relationship with the Company, its related corporations, its substantial shareholders or its officers

that could interfere, or be reasonably perceived to interfere, with the exercise of their independent judgment. They have also

confirmed their independence in accordance with the Listing Rules.

Mr Lim Hock San, Mr Foo Ko Hing and Mr Rivaie Rachman have served as Directors for more than nine years. The Board

accordingly performed a specific and rigorous review of their independence. The Board deemed that the length of service of a

Director should not determine the effectiveness of independence of an Independent Director. In assessing the independence

of a Director, the Board considers it more appropriate to have regard to the Director’s contribution in terms of professionalism,

integrity, objectivity and ability to exercise independence of judgment in his deliberation in the interest of the Company.

The Board is of the view that the Independent Directors have over the years developed significant insights in the Group’s

business and operations, and can continue to provide significant and valuable contribution objectively to the Board as a

whole. Mr Lim Hock San, Mr Foo Ko Hing and Mr Rivaie Rachman have confirmed their independence as aforesaid. After

taking into account all these factors, the Board has determined Mr Lim Hock San, Mr Foo Ko Hing and Mr Rivaie Rachman

independent. Each of Mr Lim Hock San, Mr Foo Ko Hing and Mr Rivaie Rachman abstained from the Board’s deliberation

of his independence.



Board size and diversity

The Board is of the view that the current Board members comprise persons whose diverse skills, experience and attributes

provide for effective direction for the Group. The current Board comprises individuals who are business leaders and

professionals with financial, banking, real estate, investment and accounting backgrounds. The varied backgrounds of the

Directors enable Management to benefit from their respective expertise and diverse background. The Board also considers

gender as an important aspect of diversity alongside factors such as the age, ethnicity and educational background of its

members, as it believes that diversity in the Board’s composition contributes to the quality of its decision making. The Company

will continue to consider the merits of the candidates in its Board renewal process and believes that doing so will meet its

aim of achieving diversity of perspectives as described above.

The composition of the Board is reviewed on an annual basis by the Nominating Committee to ensure that the Board has

the appropriate mix of expertise and experience, and collectively possess the necessary core competencies for effective

functioning and informed decision-making.

The experiences and credentials of the Board members are set out in the “Board of Directors” section of the Annual Report.

Role of Non-Executive Directors

The Non-Executive Directors assist the Board in performing its role by constructively challenge the development of its strategies

and bring to the Board different perspectives based on their experiences. They critically assess and review the progress of

the Management in implementing strategies set by the Board. When necessary or appropriate, the Non-Executive Directors

(including the Independent Chairman and other Independent Directors) will meet without the presence of the Management

and provide inputs to the Board.

PRINCIPLE 3: CHAIRMAN AND CHIEF EXECUTIVE OFFICER

There is a clear division of responsibilities between the leadership of the Board and Management, and no one individual has

unfettered powers of decision-making.

The roles of the Chairman and the Chief Executive Officer (“CEO”) are separate and distinct, each having their own areas of

responsibilities. The Company believes that a distinctive separation of responsibilities between the Chairman and the CEO

will ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent

decision-making. The posts of Chairman and CEO are held by Mr Lim Hock San and Mr Eugene Cho Park respectively. The

Chairman and CEO are not related.

The Chairman, Mr Lim Hock San is primarily responsible for overseeing the overall management and strategic development

of the Company.

His responsibilities include:

• Leading the Board in his role as Chairman of the Board;

• Ensuring regular meetings (with the assistance of the Company Secretary) to enable the Board to perform its duties

responsibly while not interfering with the flow of the Group’s operations;

• Preparing meeting agenda (in consultation with the CEO and CFO);

• Reviewing board papers that are presented to the Board;

• Ensuring effective communication with shareholders; and

• Promoting good corporate governance.



In assuming his roles and responsibilities, Mr Lim Hock San consults with the Board, ARMC, NC and RC on major issues

and as such, the Board believes that there are adequate safeguards in place against having a concentration of power and

authority in a single individual.

The Company’s CEO, Mr Eugene Cho Park is responsible for the day-to-day management of the Company and the Group’s

affairs. Mr Eugene Cho Park reports to the Board and ensures that policies and strategies adopted by the Board are

implemented.

There is no requirement for the Company to appoint a Lead Independent Director as the roles of Chairman and CEO are

separate and distinct. The Independent Directors meet amongst themselves without the presence of the other directors

where necessary for independent discussions and strive to provide constructive feedback to the Board after their meetings.

PRINCIPLE 4: BOARD MEMBERSHIP

The Board has a formal and transparent process for the appointment and re-appointment of directors, taking into account

the need for progressive renewal of the Board.

The NC comprises three members, all of whom including its Chairman are independent. The members of the NC are:

Mr Rivaie Rachman (Chairman) Non-Executive and Independent Director

Mr Lim Hock San Non-Executive and Independent Director

Mr Foo Ko Hing Non-Executive and Independent Director

The primary function of the NC is to determine the criteria for identifying candidates and reviewing nominations for the

appointment of directors to the Board and also to decide how the Board’s performance may be evaluated and to propose

objective performance criteria for the Board’s approval.

The NC functions under the terms of reference which sets out its responsibilities:

(a) To review board succession plans for directors, in particular, the Chairman,CEO and key management personnel;

(b) To develop the process for evaluation of the performance of the Board, its committees and directors and conduct a

formal assessment of the effectiveness of the Board, Board Committees and contribution by each director;

(c) To review the training and professional development programs for the Board;

(d) To recommend to the Board on all board appointments, re-appointments and re-nominations;

(e) To review the independence of the Independent Directors in accordance with the Code and Listing Rules.

The NC has conducted an annual review of the independence of the Independent Directors, using the criteria of independence

in the Code and the Listing Rules, and has determined that they are independent.

Multiple Board Representations

The NC ensures that new Directors are aware of their duties and obligations. The NC also decides if a Director is able to and

has been adequately carrying out his or her duties as a Director of the company.

The NC considers and it is of the view that it would not be appropriate to set a limit on the number of directorships in listed

companies that a Director may hold because directors have different capabilities, and the nature of the organisations in

which they hold appointments and the kind of committees on which they serve are of different complexities, and for each

Director to personally determine the demands of his or her competing directorships and obligations and assess the number

of directorships they could hold and serve effectively.



The NC has reviewed each Director’s outside directorships, their principal commitments and attendance and contributions to

the Board. Despite the multiple directorships, the NC is satisfied that the Directors have discharged their duties adequately

and satisfactorily for FY2019.

Details of the Directors’ principal commitments and outside directorships given in the “Board of Directors” section of the

Annual Report.

Alternative Directors

There is currently no Alternative Directors on the Board.

Selection, Appointment and Re-appointment of Directors

Annually, the NC reviews the composition of the Board and Board committees having regard to the performance and

contribution of each individual director and to ensure diversity of skills and experience within the Board and Board committees.

Where there is a resignation or retirement of an existing director, the NC will re-evaluate the Board composition to assess the

competencies for the replacement. The NC will deliberate and propose the background, skills, qualification and experience

of the candidate it deems appropriate. The factors taken into consideration by the NC could include among other things,

whether the new director can add to or complement the mix of skills and qualifications in the existing Board, relevance

of his experience and contributions to the business of the Company and the depth and breadth he could bring to Board

discussions. Candidates are sourced through a network of contacts and identified based on the established criteria. Search

can be made through relevant institutions such as the Singapore Institute of Directors (“SID”), professional organisations or

business federations or external search consultants. New directors will be appointed by way of a Board resolution, after the

NC makes the necessary recommendation to the Board.

The Constitution of the Company requires that one-third of the Board retire from office by rotation at each Annual General

Meeting (“AGM”). Accordingly, the Directors will submit themselves for re-nomination and re-election at regular intervals of

at least once every three years.

Mr Gianto Gunara, Mr Jusak Kertowidjojo and Mr Choo Kok Kiong will retire by rotation pursuant to the Constitution of the

Company. The NC has recommended to the Board, their re-election at the forthcoming annual general meeting.

In recommending the above Directors for re-election, the NC has taken into consideration these Directors’ contribution and

performance. The Board has accepted the NC’s recommendation. Each of the Directors has abstained from the Board’s

deliberation on his re-election.

In accordance with the Listing Rules, the particulars of the directors as set out in Appendix 7.4.1 of the Listing Manual in

respect of Mr Gianto Gunara, Mr Jusak Kertowidjojo and Mr Choo Kok Kiong are provided on page 37 to 43 of this Annual

Report.



PRINCIPLE 5: BOARD PERFORMANCE

The Board undertakes a formal annual assessment of its effectiveness as a whole, and that of each of its board committees

and individual directors.

Conduct of Board Performance

The NC has established a formal evaluation process to assess the effectiveness of the Board as a whole and peer assessment.

Each year, the Directors were requested to complete evaluation forms to assess the overall effectiveness of the Board and

the Board Committees, as well as peer assessment. The results of the evaluation exercise were considered by the NC,

which then made recommendations to the Board, aimed at assisting the Board to discharge its duties more effectively. The

Chairman should, in consultation with the NC, propose, where appropriate, new members to be appointed to the board or

seek the resignation of directors.

The evaluation of Board’s performance focuses on Board composition, maintenance of independence, Board information,

Board process, Board accountability, communication with Management and standard of conduct. The NC also reviews the

Board’s performance to enhance shareholders’ value in terms of the Company’s profitability, liquidity, gearing, dividend yield

and total shareholder return against industry peers based on their published financial results.

The NC reviews Individual Director’s performance with focus on the contribution by individual Directors to the Board in terms

of time commitment and in providing independent and objective perspectives based on their background, experience and

competencies in the relevant skills critical to the Company’s business and in the development of strategies to enable the

Board to have a balance of views and critically assess all relevant issues in its decision makings.

The NC has reviewed the overall performance of the Board in terms of its role and responsibilities and the conduct of its

affairs as a whole for the year under review and is of the view that the performances of the Board and Board Committees

have been satisfactory.

The Company does not use any external professional facilitator for the assessments of the Board, Board Committees and

individual Directors, and will consider the use of such facilitator as and when appropriate.

REMUNERATION MATTERS

PRINCIPLE 6: PROCEDURES FOR DEVELOPING REMUNERATION POLICES

The Board has a formal and transparent procedure for developing policies on director and executive remuneration, and for

fixing the remuneration packages of individual directors and key management personnel. No director is involved in deciding

his or her own remuneration.

The RC comprises three members, all of whom including its Chairman are independent. The members of the RC are:

Mr Foo Ko Hing (Chairman) Non-Executive and Independent Director

Mr Lim Hock San Non-Executive and Independent Director

Mr Rivaie Rachman Non-Executive and Independent Director



The RC functions under the terms of reference which sets out its responsibilities:

(a) To recommend to the Board a framework for remuneration for the Directors and key management personnel of the

Company;

(b) To determine specific remuneration packages for each Executive Director and key management personnel;

(c) To review the appropriateness of compensation for Non-Executive Directors; and

(d) To review the remuneration of employees who are substantial shareholders or immediate family members of a director,

the CEO or substantial shareholder to ensure that the remuneration of each of such employee commensurate with his

or her duties and responsibilities, and no preferential treatment is given to him or her.

All aspects of remuneration, including but not limited to Directors’ fee, salaries, allowances, bonuses and benefits in kind,

will be covered by the RC. No member of the RC or any Director is involved in the deliberations in respect of any resolution

in respect of his remuneration package.

Each of the Executive Director and key management personnel has a service agreement with the Company which can be

terminated by either party giving notice of resignation/termination. The RC has reviewed the Group’s obligations arising in the

event of termination of the Executive Directors’ and key management personnel’s contracts of service, to ensure that such

contracts of service contain fair and reasonable termination clauses which are not overly generous.

The RC will be provided with access to expert professional advice on remuneration matters as and when necessary. The

expense of such services shall be borne by the Company. For FY2019, there was no engagement of independent professional

advice.

PRINCIPLE 7: LEVEL AND MIX OF REMUNERATION

The level and structure of remuneration of the Board and key management personnel are appropriate and proportionate to

the sustained performance and value creation of the company, taking into account the strategic objectives of the company.

Remuneration of Executive Directors and key management personnel

In setting remuneration packages, the RC will take into consideration the pay and employment conditions within the industry

and in comparable companies. All the Executive Directors, including the CEO, and key management personnel have service

agreements with the Company. The service agreements cover the terms of employment, salaries and other benefits.

The remuneration of Executive Directors and key management personnel comprises both fixed and variable components.

The variable component is performance related and is linked to the Group/Company’s performance as well as individual’s

performance. Such performance-related remuneration is designed to align with the interests of shareholders and promote

long term success of the Group. The Executive Directors are not paid Directors’ fee.

Currently, the Company has no long term incentive schemes. The RC has reviewed and is satisfied that the existing

compensation structure with variable component paid out in cash has continued to be effective in incentivising performance

without being excessively compensated.

The Company does not have claw-back provisions which allow it to reclaim incentive components of remuneration from its

Directors and key management personnel.



Remuneration of Non-Executive and Independent Directors

All the Non-Executive Directors have no service contract and are compensated with Directors’ fee taking into considerations

their respective contributions and attendance at meetings. Additional variable fees are paid for appointment to board

committees according to the level of responsibilities undertaken as chairman or member of the Board committees. The RC

reviews the Directors’ fee for Non-Executive Directors to ensure that the remuneration is commensurate with their contribution

and responsibilities.

The Company will submit the quantum of Directors’ fee of each year to the shareholders for approval at each AGM.

The RC has reviewed the fee structure for non-executive directors as being reflective of their responsibilities and work

commitments without over-compensation to the extent that their independence will be compromised and recommends the

directors’ fee for FY2019 to the Board for tabling at the forthcoming annual general meeting for shareholders’ approval.

The RC considers that the current fee structure adequately compensates the non-executive directors, and given the size

and operations of the Company, any implementation of schemes to encourage non-executive directors to hold shares in the

Company may result in over-compensation. The RC will consider recommending such schemes, if appropriate.

PRINCIPLE 8: DISCLOSURE OF REMUNERATION

The company is transparent on its remuneration policies, level and mix of remuneration, the procedure for setting remuneration,

and the relationships between remuneration, performance and value creation.

Remuneration of Directors

The remunerations paid to the Directors for the financial year ended 31 December 2019 are as follows:–

Salary BonusDirector’s

FeeOther

Benefits Total

% % % % %

S$500,000 to S$1,499,999

Eugene Cho ParkExecutive Director and CEO 60 33 – 7 100

Gianto GunaraExecutive Director 60 33 – 7 100

Jusak KertowidjojoExecutive Director 72 8 – 20 100

Choo Kok KiongExecutive Director 59 33 – 8 100

Below S$500,000

Lim Hock SanNon-Executive Chairman and Independent Director – – 100 – 100

Dr Tan Chin NamNon-Executive Director – – 100 – 100

Axton SalimNon-Executive Director – – 100 – 100

Foo Ko HingNon-Executive and Independent Director – – 100 – 100

Rivaie RachmanNon-Executive and Independent Director – – 100 – 100



The Executive Directors who sit on the Board hold executive positions in the Group’s Indonesian subsidiaries. Under Indonesian

governance, there is no requirement for corporations in Indonesia to disclose the detailed remuneration of individual directors

and executives. The disclosure in Singapore would affect the confidentiality of their remuneration. The Indonesian subsidiaries

would be put into a position of unequal treatment in governing the confidentiality of their employees’ remuneration. Such

executives who are on the Board would be disadvantaged unfairly. In addition, given the highly competitive conditions in

the market place where poaching of executives is not uncommon, it is not in the interest of the Company to disclose the

remuneration of individual Executive Directors. The Board is of the view that it would be disadvantageous to the Group to

disclose the exact remuneration of the Directors.

Each Independent Director’s remuneration comprises wholly directors’ fee of not more than S$500,000.

Remuneration of Key Management Personnel

The Code recommends that the Company should name and disclose the remuneration of at least the top five key management

personnel in bands of S$250,000.

The Company has many competitors in the same industry which are private companies. By disclosing the top five key

management personnel individually in bands of S$250,000, the Company is susceptible to poaching of its personnel in a highly

competitive market place vying for talent. The competitors have publicly available information of profile of the Company’s key

personnel and remuneration benchmark. The Company does not have similar information and is seriously disadvantaged as

compared to its competitors in retaining and recruitment of key personnel. Loss of its key personnel involves considerable loss

of operational know-how and cost in recruitment of similar talent and gestation period for new key personnel to be fully inducted

into the Company’s work practices. All this would impact its business competitive edge vis-à-vis its competitors. Disclosure

of the names of the key management personnel will be not in the interest of the Company from a business perspective.

The remuneration of 3 the Company’s top 5 key management personnel is above S$250,000. The aggregate total remuneration

paid to the top 5 key management personnel (who are not directors of the Company or the CEO) in 2019 is approximately

S$1,370,146.

Remuneration of employees who are substantial shareholders or immediate family members of a director, the

CEO or a substantial shareholder

There was no employee of the Company or its subsidiaries who was an immediate family member of a Director, the CEO

or a substantial shareholder and whose remuneration exceeds S$100,000 for the financial year ended 31 December 2019.

Employee share schemes

The Company does not have any employee share scheme for its employees. The RC has reviewed and is satisfied that

the existing compensation structure with variable component paid out in cash has continued to be effective in incentivising

performance of employees without being excessive.



ACCOUNTABILITY AND AUDIT

PRINCIPLE 9: RISK MANAGEMENT AND INTERNAL CONTROLS

The Board is responsible for the governance of risk and ensures that Management maintains a sound system of risk

management and internal controls, to safeguard the interests of the company and its shareholders.

The Board is responsible for governing risks and ensuring that the Management maintains a sound system of risk management

and internal controls in safeguarding its assets and shareholders’ interests.

The ARMC, with the assistance of the internal and external auditors, reviews and reports to the Board on the adequacy and

effectiveness of the of the Company’s material internal controls, including financial, operational, compliance and information

technology controls and risk management system annually. In this respect, the AC will review the audit plans, and the findings

of the auditors and will ensure that the Company follows up on the auditors’ recommendations raised, if any, during the audit

process.

Currently, the responsibility of overseeing the Company’s risk management framework and policies is undertaken by the

ARMC together with the Management. There is no separate risk committee formed as Board is of the view that a separate

risk committee is not required for the time being and the Board will consider engaging professional consultancy firm to assist

the Management, if appropriate.

The Board reviews and determines the Group’s level of risk tolerance and risk policies, and oversees the design, implementation

and monitoring of the risk management and internal control systems.

The Group has in place a system of internal control and risk management framework for ensuring proper accounting

records and reliable financial information as well as management of business risks with a view to safeguarding shareholders’

investments and the Company’s assets. The risk management framework implemented provides for systematic and structured

review and reporting of the assessment of the degree of risk, evaluation and effectiveness of controls in place and the

requirements for further controls.

The Board has received the following assurances as at 31 December 2019:

(a) from the CEO and CFO that the financial record have been properly maintained and the financial statements give a

true and fair view of the Group’s operations and finances; and

(b) from the CEO and Chief Risk Officer that the Group’s risk management and internal control systems were adequate

and effective to address key financial, operational, compliance and information technology risks.

Based on the internal control and risk management framework established and maintained by the Group, review performed

by the Group’s internal and external auditors, regular reviews performed by the Management and assurance from the CEO,

CFO and Chief Risk officer, the Board is of the that the Group’s internal controls addressing financial, operational, compliance

and information technology risks and risk management systems, were adequate and effective as at 31 December 2019. The

ARMC concurs with the Board.

The Board notes that no system of internal control and risk management can provide absolute assurance against the

occurrence of material errors, poor judgement in decision making, human error, fraud or other irregularities.



PRINCIPLE 10: AUDIT AND RISK MANAGEMENT COMMITTEE

The Board has an Audit Committee which discharges its duties objectively.

Audit and Risk Management Committee

The ARMC comprises three members, all of whom including the Chairman are independent. The ARMC comprises the

following members:

Mr Lim Hock San (Chairman) Non-Executive and Independent Director

Mr Foo Ko Hing Non-Executive and Independent Director

Mr Rivaie Rachman Non-Executive and Independent Director

The ARMC Chairman has a Bachelor of Accountancy from the University of Singapore. He is a Fellow of The Chartered Institute

of Management Accountants (UK) and a Fellow and past President of the Institute of Singapore Chartered Accountants with

considerable business, financial and accounting experience. Mr Foo Ko Hing has considerable business, banking, investment

and finance experience having held positions in PricewaterhouseCoopers LLC and in the banking industry. Mr Rachman is

an Independent Director of Riau Development Bank and Surya Dumai Palmoil Plantation & Industry Group in Indonesia. His

previous positions were the Vice Governor of Riau Province, Head of Riau Economic Planning Board, Head of Riau Investment

Coordination Board and President Director of Riau Development Bank.

All the ARMC members are kept up to date with changes in accounting standards and issues through updates from the

external auditors. The Board is of the view that the members of the AC have sufficient accounting and financial management

expertise and experience to discharge the ARMC’s functions.

The Board is satisfied that the members of the ARMC have recent and relevant accounting or related financial management

expertise or experience to discharge the AC’s functions.

The experience and qualifications of the ARMC members are set out in the “Board of Directors” section of the annual report.

No former partner or director of the Company’s existing auditing firm or auditing corporation is a member of the ARMC.

Roles and Responsibilities of ARMC

The ARMC functions under the terms of reference which sets out its responsibilities as follows:

(a) To review the financial statements of the Company and the Group in particular significant financial reporting issues and

judgements so as to ensure the integrity of the financial statements and any announcements relating to the Group’s

financial performance before submission to the Board;

(b) To review the audit plans of the Company with the internal and external auditors and the internal and external auditors’

reports;

(c) To review at least annually with the internal and external auditors, the adequacy and effectiveness of the company’s

internal controls and risk management systems;

(d) To review the adequacy, effectiveness, independence, scope and results of the external audit and the company’s

internal audit function;

(e) To review and discuss with the internal and external auditors any suspected fraud or irregularity, or suspected

infringement of any relevant laws, rules or regulations;

(f) To review the assurances from the CEO, CFO on the financial records and financial statements; and from the CEO

and Chief Risk Officer on the risk management system;

(g) To review the adequacy of the finance functions and the quality of finance staff and co-operation given by the

Company’s management to the internal and external auditors;



(h) To make recommendations to our Board on the appointment, re-appointment and removal of the internal and external

auditors;

(i) To review interested person transactions and potential conflicts of interest;

(j) To undertake such other reviews and projects as may be requested by the Board, and report to the Board its findings

from time to time on matters arising;

(k) To generally undertake such other functions and duties as may be required by the statute, regulations or the Listing

Manual, or by such amendments as may be made thereto from time to time; and

(l) To review arrangements by which the staff of the Company may, in confidence, raise concerns about possible

improprieties in matters of financial reporting.

The ARMC has the power to conduct or authorise investigations into any matters within the ARMC’s scope of responsibility.

The ARMC is authorised to obtain independent professional advice if it deems necessary in the discharge of its responsibilities.

Such expenses are to be borne by the Company. No member of the ARMC or any Director is involved in the deliberations

and voting on any resolutions in respect of matters he is interested in.

The ARMC has full access to and co-operation of the Management and has full discretion to invite any Director or executive

officer to attend its meetings, and has been given reasonable resources to enable it to discharge its functions. The ARMC

meets with both the external and internal auditors without the presence of the Management at least once a year.

External Auditors

The Company confirms that it has complied with Rules 712, 715 and 716 of the Listing Manual in engaging Foo Kon Tan LLP

(“FKT”) registered with the Accounting and Corporate Regulatory Authority, as the external auditors of the Company and of

its Singapore subsidiaries, and other suitable audit firms for its foreign subsidiaries. The ARMC reviews the independence of

FKT annually.

Having reviewed with FKT, it audit plan, scope of work and auditors’ report for FY2019, the ARMC was satisfied with their work.

The aggregate amount of audit fees paid and payable by the Group to the external auditors for FY2019 was approximately

S$1,962,000 of which audit fees amounted to approximately S$1,888,000 and non-audit fees amounted to approximately

S$74,000.

The ARMC, having reviewed the range and value of non-audit services performed by FKT was satisfied that the nature and

extent of such services will not prejudice the independence and objectivity of the external auditor. The ARMC recommended

that Foo Kon Tan LLP be nominated for re-appointment as auditor at the forthcoming AGM. The ARMC had also reviewed

the appointment of the external auditors of those subsidiaries who are not FKT and is satisfied that such appointment would

not compromise the standard and effectiveness of the audit.

Whistle-Blowing Policy

The Company has in place a whistle-blowing framework.

Employees are free to bring complaints in confidence to the attention of their supervisors, the Human Resources Department.

The recipient of such complaints shall forward them promptly to the ARMC Chairman. The Group will treat all information

received confidentially and protect the identity and the interest of all whistleblowers. Following investigation and evaluation

of a complaint, the ARMC Chairman shall report to the ARMC on recommended disciplinary or remedial action, if any. The

action determined by the ARMC to be appropriated shall then be brought to the Board or to appropriate members of senior

management for authorization and implementation respectively. An employee can access the ARMC Chairman directly to

raise concern if he feels that it could not be effectively addressed at managerial level.



The policy is communicated to all employees as part of the Group’s efforts to promote awareness of fraud control.

The ARMC confirms that no reports have been received under the whistle-blowing policy in 2019.

Internal Audit Function

The Company’s internal audit function is outsourced to an external professional firm, PricewaterhouseCoopers, Indonesia

(“IA”). The IA reports directly to the ARMC Chairman on all internal audit matters.

The primary functions of internal audit are to help:–

(a) assess if adequate systems of internal controls are in place to protect the assets of the Group and to ensure control

procedures are complied with;

(b) assess if operations of the business processes under review are conducted efficiently and effectively; and

(c) identify and recommend improvement to internal control procedures, where required.

PricewaterhouseCoopers, Indonesia has the professionals with relevant qualifications and experience to perform the review and

test of controls of the Group’s processes which is consistent with the International Standards for the Professional Practice of

Internal Auditing established by the Institute of Internal Auditors. The IA has confirmed their independence to the ARMC. The

IA performs the internal audit according to standards set by the Institute of Internal Auditors. The IA has unrestricted access

to all the Company’s documents, records, properties and personnel, including access to the ARMC. The ARMC is satisfied

that the Company’s internal audit function outsourced to PricewaterhouseCoopers, Indonesia is independent, adequately

resourced and effective.

The ARMC has annually reviewed the Company’s internal control assessment and based on the internal auditors and external

auditors reports and the internal controls in place, it is satisfied that there are adequate and effective internal controls in the

Company.

SHAREHOLDER RIGHTS AND ENGAGEMENT

PRINCIPLE 11: SHAREHOLDER RIGHTS AND CONDUCT OF MEETINGS

The company treats all shareholders fairly and equitably in order to enable them to exercise shareholders’ rights and have

the opportunity to communicate their views on matters affecting the company. The company gives shareholders a balanced

and understandable assessment of its performance, position and prospects.

The Company’s general meetings are the principal forums for dialogue with shareholders to engage the Board to ask questions

on the resolutions tabled at the general meetings and to express their views. The Company will consider the use of other

forums such as analyst briefings as and when applicable. The Company’s Investor Relations team (“IR team”) as and when

appropriate participates in investor seminars, conference and roadshows to keep the market and investors apprised of the

Group’s developments and has contact details of the IR team at is website for investors to channel their comments and queries.

Shareholders are encouraged to attend the general meetings of the Company to ensure a high level of accountability and to

stay apprised of the Group’s strategy and goals. Notice of the meeting will be advertised in newspapers and announced on

SGXNET.

At previous AGM, the Company had made presentation to shareholders to update them on the Company’s performance,

position and prospects at general meetings. Presentation materials would be made available on SGXNET and the company’s

website for the benefit of shareholders. The Company will consider doing likewise at the forthcoming AGM.



The Company’s Constitution allows a member (other than a relevant intermediary as defined in Section 181 of the

Companies Act) to appoint one or two proxies in his absence to attend and vote in his stead at the general meetings. The

Companies Act allows relevant intermediaries that include CPF Approved nominees to appoint multiple proxies, and empower

CPF investors to attend and vote at general meetings of the Company as their CPF Approved Nominees’ proxies. The Company

will have separate resolutions on each distinct issue. For resolutions that are special business, explanations are given in the

accompanying notes to the Notice of the AGM. For resolutions on the election or re-election of directors, information on the

Directors as set out in Appendix 7.4.1 of the Listing Manual are given in this Annual Report.

The Chairman of each ARMC, RC and NC are normally available at the AGMs to answer any questions relating to the work

of these Committees. The Company’s external auditors are also present to address queries related to the audit by the

shareholders. In 2019, the Company held one general meeting, namely the annual general meeting, which was attended by

all the Directors.

In compliance with Listing Rules, all the resolutions at the forthcoming AGM will be put to vote by electronic poll to allow

greater transparency and more equitable participation by shareholders.

Voting and vote tabulation procedures are disclosed at the general meetings. Votes cast for, or against, each resolution will

be validated by an independent scrutineer and displayed on the screen at general meetings. The total numbers of votes cast

for or against the resolutions are also announced after the general meetings via SGXNET.

The Company prepares minutes of general meetings on the proceedings and questions raised by shareholders and answers

given by the Board and Management. The company does not publish minutes of general meetings of shareholders on its

corporate website as the Companies Act provides for the minutes to be made available to the company's shareholders without

inclusion of the public at large. Any shareholder including those who did not attend the general meeting can request a copy

from the Company in accordance with Section 189 of the Companies Act.

The Company does not have a dividend policy. The Board will consider the Group’s financial performance, liquidity, capital

expenditure commitment and need to repay debt before proposing to declare dividend. The Notice for the forthcoming AGM

does not carry a declaration of dividend for FY 2019 as the Company is committing its cash resources to further develop its

Resorts, Utilities and Automotive businesses. The Company will consider the declaration of dividend when the cash permits.

PRINCIPLE 12: ENGAGEMENT WITH SHAREHOLDERS

The company communicates regularly with its shareholders and facilitates the participation of shareholders during general

meetings and other dialogues to allow shareholders to communicate their views on various matters affecting the company.

In line with continuous obligations of the Company pursuant to the SGX-ST’s Listing Rules, the Company’s policy is that all

shareholders be informed of all major developments that impact the Group.

Information is disseminated to shareholders on a timely basis through:

(a) SGXNET announcements and news release;

(b) Annual Report prepared and issued to all shareholders;

(c) Press releases on major developments of the Group;

(d) Notices of and explanatory memoranda for general meetings; and

(e) Company’s website at www.gallantventure.com which shareholders can access information on the Group.

The Company strives to reach out to shareholders and investors via its online investor relations site within its corporate website

www.gallantventure.com where it updates shareholders and investors on the latest news and business developments of the

Group. Shareholders and investors are also provided with an investor relations contact at (65) 6389 3535.



The Company’s investor relations policy is to communicate with its shareholders and the investment community through the

timely release of announcements to the SGX-ST via SGXNET. The Company does not practice selective disclosure and price

sensitive or trade sensitive information is publicly released on an immediate basis where required under the Listing Rules.

Price sensitive or trade sensitive information will be publicly released either before the Company meets with any group of

investors or analysts or simultaneously with such meetings. Financial results and annual reports are announced or issued

within legally prescribed periods. The Board also ensures timely and full disclosure of material corporate developments to

shareholders. The Board also reviews regulatory compliance reports from management to ensure that the Group complies

with the relevant regulatory requirements.

PRINCIPLE 13: ENGAGEMENT WITH STAKEHOLDERS

The Board adopts an inclusive approach by considering and balancing the needs and interests of material stakeholders, as

part of its overall responsibility to ensure that the best interests of the company are served.

The company has arrangements in place to identify and engage with its material stakeholder groups and to manage its

relationships with such groups through its various business units on an on-going basis in the course of their business with

suppliers, customers and the CSR programs involving the local community and on an annual basis in conjunction with the

preparation of the Company’s sustainability report.

The Group’s material stakeholders are its shareholders, customers, employees, regulator and suppliers and engagement with

them are set out in its Sustainability Report for FY2018 published on 16 May 2019 on SGXNET.

The Group maintains a corporate website at http://www.gallanventure.com at which stakeholders can access information on

the Group. The website provides, inter alia, corporate announcements, press releases and profiles of the Group. The Company

has an online investor relations site within its corporate website as an outreach to shareholders and all other stakeholders.

Shareholders and stakeholders are provided with an investor relations contact at (65) 6389 3535.

DEALINGS IN SECURITIES

The Company has procedures in place prohibiting dealings in the Company’s securities by its directors and employees on short

term considerations and during the period commencing two weeks before and up to the announcement of the Company’s

financial statements for each of the first three quarters of FY2019 and one month before and up to the announcement of the

Company’s full year financial statements for FY2019. With the adoption of half yearly reporting of the financial statements

from FY2020 as announced on 9 March 2020, henceforth, the directors and employees are prohibited from dealing in the

Company’s Securities one month before and up to the release of the half year and full year financial statements.

SUSTAINABILITY REPORTING

The Board believes that in order to ensure long term success of a business, corporates should integrate sustainability into

their operations and strategies. We are committed to conduct our businesses in a sustainable manner and aim to create

positive value for all our stakeholders.

During the year, the Sustainability Reporting Committee engaged our internal and external stakeholders to seek feedback to

identify areas for improvement for our upcoming report. We continue to benchmark ourselves against our peers and during

the process, additional materiality matrix has been identified.

Our Board continues to monitor our progress to ensure we continue to improve our sustainability performance and goals to

minimise our impact on the environment and the communities in which we operated and leverage on the sustainability strategy

to enhance long-term shareholder’s value.

The full sustainability report for FY 2019 in digital form will be available on our website: www.gallantventure.com by 31 May

2020.



MATERIAL CONTRACTS

Save as may be disclosed in this Annual Report including the Appendix relating to the proposed renewal of the interested

person transactions mandate, there were no material contracts entered into by the Company or its subsidiary companies

involving the interests of the Chief Executive Officer, any Directors or controlling shareholders of the Company which were

still subsisting at the end of FY2019, or if not then subsisting, entered into since the end of FY2018.

INTERESTED PERSON TRANSACTIONS POLICY

The Company adopted an internal policy in respect of any transactions with interested person and has established procedures

for review and approval of the interested person transactions entered into by the Group. The Audit Committee has reviewed

the rationale and terms of the Group’s interested person transactions and is of the view that the interested person transactions

are on normal commercial terms and are not prejudicial to the interests of the shareholders.

The interested person transactions transacted for the financial year ended 31 December 2019 by the Group are as follows:

Name of Interested Person

Aggregate value of all interested person transactions conducted under shareholders’

mandate pursuant to Rule 920 (excluding transactions less than S$100,000)

S$’000

Sales of Goods and Services

• Salim Group(1) 15,138

• PT Soxal Batamindo Industrial Gases(2) 202

Purchase of Goods and Services

• Salim Group 3,214

• IMAS Group(3) 797

Interest Income

• Salim Group 414

Dividend Income

• IMAS Group 3,906

(1) Salim Group refers to Mr Anthoni Salim and the group of companies controlled by him or, if the context requires, Mr Anthoni Salim.

(2) An associated company.(3) IMAS Group refers to PT Indomobil Sukses Internasional Tbk, its subsidiaries and associated companies.

There are no Interested Person Transactions conducted outside the Shareholders’ Mandate (excluding transactions less than S$100,000).



USE OF SUBSCRIPTION PROCEEDS AS AT DATE OF THIS ANNUAL REPORT

The Company refers to the net proceeds of approximately S$68,173,000 raised from the subscription of 513,045,113 new

ordinary shares in the capital of the Company at an issue price of S$0.133 for each Subscription Share on 14 December

2017. The use of proceeds is in accordance with the stated use and is in accordance with the percentage allocated in the

Company’s announcement dated 27 June 2018.

As at date of this Annual Report, the status on the use of the net proceeds is as follows:–

Intended use of net proceeds Allocated Amount allocated

Net proceeds utilised as at this Annual

Report

Balance of net proceeds as

at date of this Annual Report

% S$ million S$ million S$ million

General working capital(1) 50 34.085 11.098 22.987

Repayment of loans 50 34.085 24.121 9.964

100 68.170 35.219 32.951

(1) The breakdown of net proceeds used for general working capital was S$0.950 million for salary related expenses, S$0.414 million for payment to suppliers for operating expenses and S$9.779 million for payment of extension of land rights in Batam.



We are pleased to present this statement to the members together with the audited consolidated financial statements of

Gallant Venture Ltd. (the “Company”) and its subsidiaries (collectively, the “Group”) and the statement of financial position of

the Company for the financial year ended 31 December 2019.

In the opinion of the Directors,

(a) the accompanying consolidated financial statements of the Group and statement of financial position of the Company,

are drawn up so as to give a true and fair view of the financial position of the Company and of the Group as at

31 December 2019 and the financial performance, changes in equity and cash flows of the Group for the financial

year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”)

and Singapore Financial Reporting Standards (International) (“SFRS(I)”); and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts

as and when they fall due, as disclosed in Note 2(a)(h) – Going concern.

The Board of Directors has, on the date of this statement, authorised these financial statements for issue.

Names of Directors

The Directors of the Company to office at the date of this statement are:

Mr Lim Hock San (Non-Executive Chairman and Independent Director)

Mr Eugene Cho Park (Executive Director and Chief Executive Officer)

Mr Gianto Gunara (Executive Director)

Mr Jusak Kertowidjojo (Executive Director)

Mr Choo Kok Kiong (Executive Director)

Dr Tan Chin Nam (Non-Executive Director)

Mr Axton Salim (Non-Executive Director)

Mr Foo Ko Hing (Non-Executive and Independent Director)

Mr Rivaie Rachman (Non-Executive and Independent Director)

Arrangements to enable Directors to acquire shares or debentures

During and at the end of the financial year, neither the Company nor any of the subsidiaries was a party to any arrangement

which the object of which was to enable the Directors to acquire benefits through the acquisition of shares in or debentures

of the Company or of any other corporate body, other than as disclosed in this statement.

DIRECTORS’ STATEMENTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019


Directors’ interests in shares or debentures

According to the Register of Directors’ Shareholdings kept by the Company under Section 164 of the Act, none of the

Directors who held office at the end of the financial year had any interest in the shares or debentures of the Company or its

related corporations except as follows:

Number of ordinary shares

registered in the name

of Director or nominee

Number of ordinary shares

in which Director is

deemed to have an interest

The Company

As at

1.1.2019

As at

31.12.2019

and

21.1.2020

As at

1.1.2019

As at

31.12.2019

and

21.1.2020

Lim Hock San 1,714,000 1,714,000 – –

Eugene Cho Park 200,000 200,000 – –

Gianto Gunara 200,000 200,000 – –

Share options scheme

There were no share options granted during the financial year to subscribe for unissued shares of the Company or of its

subsidiaries.

There were no shares issued during the financial year by virtue of the exercise of options to take up unissued shares of the

Company.

There were no unissued shares under option at the end of the financial year.

Audit and Risk Management Committee

The Audit and Risk Management Committee (“ARMC”) at the end of the financial year comprises the following members:

Mr Lim Hock San (Chairman)

Mr Foo Ko Hing

Mr Rivaie Rachman

The ARMC performs the functions set out in Section 201B (5) of the Act, the SGX Listing Manual and the Code of Corporate

Governance. In performing those functions, the committee reviewed the following:

(i) overall scope of both the internal and external audits and the assistance given by the Company’s officers to the auditors.

It met with the Company’s internal and external auditors to discuss the results of their respective examinations and

their evaluation of the Company’s system of internal accounting controls;

(ii) the audit plan of the Company’s independent auditor and any recommendations on internal accounting controls arising

from the statutory audit;

(iii) the quarterly financial information (where applicable) and the statement of financial position of the Company and the

consolidated financial statements of the Group for the financial year ended 31 December 2019 as well as the auditor’s

report thereon;



Audit and Risk Management Committee (Cont’d)

(iv) effectiveness of the Company’s and the Group’s material internal controls, including financial, operational, compliance

and information technology controls and risk management via reviews carried out by the internal auditors;

(v) met with the external auditor, other committees, and management in separate executive sessions to discuss any

matters that these groups believe should be discussed privately with the ARMC;

(vi) reviewed legal and regulatory matters that may have a material impact on the financial statements, related compliance

policies and programmes and any reports received from regulators;

(vii) reviewed the cost effectiveness and the independence and objectivity of the external auditor;

(viii) reviewed the nature and extent of non-audit services provided by the external auditor;

(ix) recommended to the board of directors the external auditor to be nominated, approved the compensation of the

external auditor, and reviewed the scope and results of the audit;

(x) reported actions and minutes of the ARMC to the board of directors with such recommendations as the ARMC

considered appropriate; and

(xi) interested person transactions (as defined in Chapter 9 of the Listing Manual of the Singapore Exchange).

The ARMC has full access to management and is given the resources required for it to discharge its functions. It has full

authority and the discretion to invite any Director or executive officer to attend its meetings. The ARMC also recommends

the appointment of the external auditor and reviews the level of audit and non-audit fees.

The ARMC is satisfied with the independence and objectivity of the external auditor and has recommended to the Board

of Directors that the auditor, Foo Kon Tan LLP, be nominated for re-appointment as auditor at the forthcoming Annual

General Meeting of the Company.

Full details regarding the ARMC are provided in the Report on Corporate Governance.

In appointing our auditors for the Company, subsidiaries and significant associated companies, we have complied with

Rules 712 and 715 of the SGX Listing Manual.



Independent auditor

The independent auditor, Foo Kon Tan LLP, Public Accountants and Chartered Accountants, has expressed its willingness

to accept re-appointment.

On behalf of the Directors

............................................................................

EUGENE CHO PARK

............................................................................

CHOO KOK KIONG

Dated: 14 April 2020



Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Gallant Venture Ltd. (the “Company”) and its subsidiaries

(the “Group”), which comprise the statements of financial position of the Company and the Group as at 31 December 2019,

the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated

statement of cash flows of the Group for the financial year then ended, and notes to the financial statements, including a

summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements of the Group and the statement of financial position of the

Company are properly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (the “Act”) and Singapore

Financial Reporting Standards (International) (“SFRS(I)”) so as to give a true and fair view of the consolidated financial position

of the Group and the financial position of the Company as at 31 December 2019 and the consolidated financial performance,

consolidated changes in equity and consolidated cash flows of the Group for the financial year ended on that date.

Basis for Opinion

We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those

standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our

report. We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority (“ACRA”)

Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the

ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other

ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we

have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial

statements of the current period. These matters were addressed in the context of our audit of the financial statements as a

whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

(a) Impairment assessment of investments in subsidiaries of the Company (Note 7) and goodwill of the Group

(Note 3)

As at 31 December 2019, investments in subsidiaries of the Company amount to S$2.50 billion representing about

97% of the Company’s total assets.

As at 31 December 2019, the Group has goodwill with net book value of S$427 million arising from its acquisition of

automotive business included in intangible assets, representing about 8% of the Group’s total assets.

Non-financial assets are tested for impairment whenever events or changes in circumstances indicate that the carrying

amount may not be recoverable. Goodwill is tested for impairment annually, or more frequently if the events and

circumstances indicate that the carrying value may be impaired.

INDEPENDENT AUDITOR’S REPORTTO THE MEMBERS OF GALLANT VENTURE LTD.


Report on the Audit of the Financial Statements (Cont’d)

Key Audit Matters (Cont’d)

(a) Impairment assessment of investment in subsidiaries of the Company (Note 7) and goodwill of the Group

(Note 3) (Cont’d)

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount,

the higher of fair value less cost to sell and value-in-use (“VIU”). The recoverable amount from VIU calculation is based

on certain key assumptions, such as the 5-year cash flow projections and the growth rate, terminal value and discount

rate of the cash generating unit (“CGU”) in order to calculate the present value of the CGU’s future cash flows. These

assumptions which are determined by management are judgmental. A small change in the assumptions may have a

significant impact to the estimation of the recoverable amount.

In determining appropriate CGU level, the Company and the Group have performed the impairment assessment at the

smallest CGU identifiable – either at the business segment or at the entity level.

Our response and work performed

Our audit procedures included among others, evaluating the identification of CGUs within the Group. We obtained the

valuation model prepared by management and the inputs and assumptions used.

We engaged auditor’s expert to evaluate the valuation model. We assessed whether the auditor’s expert has the

necessary competency and objectivity for our purposes. We also obtained an understanding of the nature and scope

of objectives of that expert’s work and evaluating the adequacy of that work.

In the computation of the 5-years discounted cash flow projections (including terminal value), the Group had taken into

account the indicative market prices of their goods, and used inputs, such as market growth rate, weighted average

cost of capital and other factors, typical of similar industry. Management had applied its knowledge of the business

in the review of these estimates.

Through our auditor’s expert, we assessed reasonableness of the methodology adopted, inputs and basis and

assumptions used to arrive at the recoverable amounts of the CGUs based on the VIU calculations. We also checked

the arithmetical accuracy and completeness of the VIU calculations.

We also focused on the adequacy of disclosures of key assumptions and sensitivity. The Group’s disclosures on

intangible assets and investments in subsidiaries are included in Note 3 and Note 7 to the financial statements

respectively.

(b) Impairment assessment of financing receivables (Note 9) and trade receivables (Note 14) of the Group

As at 31 December 2019, total financing receivables of the Group amounts to S$1.40 billion, in which S$0.59 billion

is classified under current assets and S$0.81 billion is classified under non-current asset. Total financing receivables

represents about 25% of the Group’s total assets.

As at 31 December 2019, trade receivables amount to S$229.7 million, representing about 4% of the Group’s total

assets.





(b) Impairment assessment of financing receivables (Note 9) and trade receivables (Note 14) of the Group

(Cont’d)

The Group applies on a forward-looking basis the expected credit losses (“ECL”) associated with its financing

receivables and trade receivables in accordance with SFRS(I) 9 Financial Instruments.

The Group elects to assess the ECL on its financing receivables using the general approach. The impairment

methodology applied depends on whether there has been a significant increase in credit risk. ECL is measured as an

allowance equal to 12-month ECL for Stage-1 (low credit risk) assets or lifetime ECL for Stage-2 (deterioration in credit

risk) or Stage-3 (credit-impaired) assets. For credit exposures for which there has not been a significant increase in

credit risk or credit impaired since initial recognition (Stage-1), ECL is provided for credit losses that result from default

events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has

been a significant increase in credit risk or credit-impaired since initial recognition (Stage-2 and Stage-3 respectively),

a loss allowance is recognised for credit losses expected over the remaining life of the exposure, irrespective of timing

of the default (a lifetime ECL).

For receivables which are trade in nature, the Group applies the simplified approach in calculating ECL. The Group

does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECL at each reporting

date. The Group establishes a provision matrix that is based on its historical credit loss experience, adjusted for current

market conditions and forward-looking factors specific to the debtors and the economic environment.

Assessing the ECL for impairment of receivables requires management to make subjective judgements. ECL is a

function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the

exposure at default.

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECL is

a significant estimate. The amount of ECL is sensitive to changes in circumstances and forecast economic conditions.


We evaluated the appropriateness of the general approach and simplified approach used by management, including

assessing the reasonableness of assumptions used in determining changes in credit risk and historical default rates

adjusted for current conditions and forward-looking information, respectively.

We reviewed the Group’s design and operating effectiveness of the controls over the financing receivables’ data,

receivables’ collection process, and the ageing of receivables’ balances. These controls included those of credit

review and approval.

We reviewed the Group’s processes and controls for monitoring and identifying trade receivables with collection risks.

We performed audit procedures, amongst others, obtaining trade receivable confirmations, assessing the facts and

circumstances surrounding the outstanding amount presented by management, tested the accuracy of the ageing

report and reviewed for evidence of collection by way of subsequent receipts after the year end.

We recomputed management’s calculation of the ECL. We also reviewed the adequacy and reasonableness of the

relevant disclosures. The Group’s disclosures on the credit risk are included in Note 39(b) to the financial statements.





(c) Impairment assessment of property, plant equipment (Note 4)

As at 31 December 2019, the Group’s property, plant and equipment amounts to S$1.20 billion, represents about

21% of the Group’s total assets.

Non-financial assets are tested for impairment whenever events or changes in circumstances indicate that the carrying

amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount,

the higher of fair value less cost to sell and value-in-use (“VIU”). The recoverable amount from VIU calculation is based

on certain key assumptions, such as cash flow projections covering a five-year period and the perpetual growth rate

and discount rate per cash generating unit (“CGU”). A CGU is defined as the smallest identifiable group of assets that

generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. These

assumptions which are determined by management are judgmental.

In determining appropriate CGU level, the Group has performed the impairment assessment of property, plant and

equipment according to the smallest CGU identifiable.


Our audit procedures included among others, assessing appropriateness of cash-generating units identified by

management, evaluating management’s assessment for impairment indications, reviewing the valuation model and

assumptions used.

We reviewed the appropriateness of cash-generating units (“CGUs”) as identified by management.

We evaluated whether there had been significant changes in the external and internal factors considered by the Group

in assessing whether indicators of impairment exist.

In the assessment of impairment, the Group takes into account the indicative open market prices of the leasehold

land, building and infrastructure, utilities plant and machinery, transportation equipment and vehicles, typical of similar

industries. Senior management has applied its knowledge of the business in the review of these estimates.

We reviewed, through the component auditor’s expert, management’s expert estimates and key assumptions

adopted in the valuation methodologies and the recoverable amounts of CGUs associated with the property, plant

and equipment.

We have also assessed the competencies and objectivities of the component auditor’s expert.

We also focused on the adequacy of disclosures about key assumptions and sensitivity. The disclosures about the

Group’s property, plant and equipment are included in Note 4.




Other Information

Management is responsible for the other information. The other information comprises the “Directors’ Statement” section of

the Annual Report but does not include the financial statements and our auditor’s report thereon, which we obtained prior to

the date of this auditor’s report, and the remaining sections of the Annual Report which are expected to be made available

to us after that date.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form

of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and,

in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the audit, or otherwise appears to be materially misstated.

If based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report,

we conclude that there is a material misstatement of this other information, we are required to report that fact. We have

nothing to report in this regard.

When we read the remaining sections of the Annual Report, if we conclude that there is a material misstatement therein, we

are required to communicate the matter to the directors and take appropriate actions in accordance with SSAs.

Responsibilities of Management and Directors for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the

provisions of the Act and SFRS(I), and for devising and maintaining a system of internal accounting controls sufficient to provide

a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are

properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements

and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going

concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless

management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance

is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a

material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually

or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of

these financial statements.




Auditor’s Responsibilities for the Audit of the Financial Statements (Cont’d)

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism

throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design

and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate

to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than

for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the

override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate

in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal

control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related

disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the

audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant

doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we

are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such

disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to

the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as

a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and

whether the financial statements represent the underlying transactions and events in a manner that achieves fair

presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities

within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,

supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant

audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding

independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on

our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit

of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our

auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,

we determine that a matter should not be communicated in our report because the adverse consequences of doing so would

reasonably be expected to outweigh the public interest benefits of such communication.



Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries

incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

The engagement partner of the audit resulting in this independent auditor’s report is Mr Ho Teik Tiong.

Foo Kon Tan LLP

Public Accountants and

Chartered Accountants

Singapore, 14 April 2020



The annexed notes form an integral part of and should be read in conjunction with these financial statements.

The Company The Group31 Dec 31 Dec 31 Dec 31 Dec

2019 2018 2019 2018Note $’000 $’000 $’000 $’000

AssetsNon-CurrentIntangible assets 3 27 62 644,062 716,234Property, plant and equipment 4 158 310 1,153,404 769,129Right-of-use assets 5 409 – 44,236 –Investment properties 6 – – 101,775 182,203Subsidiaries 7 2,460,620 2,537,174 – –Associates 8 – – 149,940 116,269Financing receivables 9 – – 807,801 680,318Deferred tax assets 10 – – 41,079 34,542Other non-current assets 11 155 155 264,380 345,388

2,461,369 2,537,701 3,206,677 2,844,083CurrentLand inventories 12 – – 595,241 594,654Other inventories 13 – – 274,606 359,552Financing receivables 9 – – 587,013 519,405Trade and other receivables 14 76,960 81,393 674,981 703,775Cash and cash equivalents 15 1,747 381 230,524 228,879

78,707 81,774 2,362,365 2,406,265

Total assets 2,540,076 2,619,475 5,569,042 5,250,348

Equity and LiabilitiesEquityShare capital 16 1,958,546 1,948,307 1,958,546 1,948,307Treasury shares 17 (50) (50) (50) (50)Accumulated losses (280,912) (148,600) (547,610) (373,273)Reserves 18 80,000 80,000 (164,388) (136,594)

Equity attributable to equity holders of the Company 1,757,584 1,879,657 1,246,498 1,438,390

Non-controlling interests – – 272,642 293,995

Total equity 1,757,584 1,879,657 1,519,140 1,732,385LiabilitiesNon-CurrentDeferred tax liabilities 10 – – 101,790 102,209Borrowings 19 290,495 311,489 1,490,111 1,030,198Debt securities 20 – – 103,369 163,237Employee benefits liabilities 21 – – 43,867 36,709Other non-current liabilities 22 88 88 72,056 32,780Lease liabilities 23 165 – 6,195 –Contract liabilities 27 – – 12,873 11,621

290,748 311,577 1,830,261 1,376,754CurrentBorrowings 19 404,457 381,583 1,610,633 1,410,338Debt securities 20 – – 67,474 195,560Lease liabilities 23 231 – 13,405 –Trade and other payables 24 85,307 45,494 495,584 505,260Contract liabilities 27 – – 20,153 15,195Current tax payable 1,749 1,164 12,392 14,856

491,744 428,241 2,219,641 2,141,209

Total liabilities 782,492 739,818 4,049,902 3,517,963

Total equity and liabilities 2,540,076 2,619,475 5,569,042 5,250,348

STATEMENTS OF FINANCIAL POSITIONAS AT 31 DECEMBER 2019



Year ended Year ended

31 December

2019

31 December

2018

Note $’000 $’000

Revenue 27 1,965,687 1,832,713

Cost of sales (1,575,443) (1,470,278)

Gross profit 390,244 362,435

Other income 28 50,238 76,400

General and administrative expenses (213,134) (189,031)

Other operating expenses 29 (257,334) (147,235)

Share of associate companies’ results (3,744) (14,473)

Finance costs 30 (186,240) (136,690)

Loss before taxation 31 (219,970) (48,594)

Taxation 32 (35,118) (27,274)

Loss after taxation (255,088) (75,868)

Other comprehensive (loss)/income after taxation:

Items that are/may be reclassified subsequently to profit or loss

Change in fair value of cash flow hedges, net of tax 18(iii) (17,171) (2,620)

Currency translation differences from foreign subsidiaries 18(ii) 21,211 (36,752)

Items that will not be reclassified subsequently to profit or loss

Change in fair value on equity instruments at fair value through other

comprehensive income 18(iv) 10,623 76,285

Remeasurements of defined benefit plans 18(v) (1,079) 5,871

Other comprehensive income for the year after taxation 33 13,584 42,784

Total comprehensive loss for the year (241,504) (33,084)

Loss attributable to:

– Equity holders of the Company (221,976) (73,748)

– Non-controlling interests (33,112) (2,120)

(255,088) (75,868)

Total comprehensive (loss)/income attributable to:

– Equity holders of the Company (212,170) (40,257)

– Non-controlling interests (29,334) 7,173

(241,504) (33,084)

Cents Cents

Loss per share

– Basic 34 (4.153) (1.382)

– Diluted (4.153) (1.382)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019



Attributable to owners of the Company

Share

capital

Treasury

shares

Capital

reserve

Translation

reserve

Hedging

reserve

Fair value

reserve

Other

reserves

Accumulated

losses Total

Non-

controlling

interests

Total

equity

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Balance at 1 January 2019 1,948,307 (50) (105,771) (108,341) (2,254) 64,175 15,597 (373,273) 1,438,390 293,995 1,732,385

Loss for the year – – – – – – – (221,976) (221,976) (33,112) (255,088)

Other comprehensive

income/(loss) – – – 13,666 (12,358) 7,588 910 – 9,806 3,778 13,584

Total comprehensive

income/(loss) for

the year – – – 13,666 (12,358) 7,588 910 (221,976) (212,170) (29,334) (241,504)

Transactions with

owners

Transfer of fair value reserve

of equity Instruments

designated as FVOCI – – – – – (47,639) – 47,639 – – –

Acquisition of subsidiary

with non-controlling

interests – – – – – – – – – (145) (145)

Dividends paid to

non-controlling interests – – – – – – – – – (2,450) (2,450)

Issuance of shares 10,300 – – – – – – – 10,300 – 10,300

Share issuance expenses (61) – – – – – – – (61) – (61)

Changes in interest in

subsidiaries and effect

of transaction with

non-controlling interests – – – – – – 10,039 – 10,039 10,576 20,615

Balance at 31 December

2019 1,958,546 (50) (105,771) (94,675) (14,612) 24,124 26,546 (547,610) 1,246,498 272,642 1,519,140

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019


Attributable to owners of the Company

Share

capital

Treasury

shares

Capital

reserve

Translation

reserve

Hedging

reserve

Fair value

reserve

Other

reserves

Accumulated

losses Total

Non-

controlling

interests

Total

equity

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Balance at 1 January 2018,

as reported 1,948,307 – (105,771) (84,851) (474) (18,838) 4,945 (299,198) 1,444,120 267,970 1,712,090

Effects of adoption of

SFRS (I) 9 – – – (276) – 28,549 – (327) 27,946 11,050 38,996

Balance at 1 January 2018,

as restated 1,948,307 – (105,771) (85,127) (474) 9,711 4,945 (299,525) 1,472,066 279,020 1,751,086

Loss for the year – – – – – – – (73,748) (73,748) (2,120) (75,868)

Other comprehensive

(loss)/income – – – (23,214) (1,780) 54,464 4,021 – 33,491 9,293 42,784

Total comprehensive

(loss)/income for

the year – – – (23,214) (1,780) 54,464 4,021 (73,748) (40,257) 7,173 (33,084)

Transaction with owners

Purchase of treasury

shares (Note 17) – (50) – – – – – – (50) – (50)

Dilution in interests of

subsidiary with loss of

control (Note 7) – – – – – – – – – 79 79

Dividends paid to

non-controlling interests – – – – – – – – – (376) (376)

Changes in interest in

subsidiaries and effect

of transaction with

non-controlling interests – – – – – – 6,631 – 6,631 8,099 14,730

Balance at 31 December

2018 1,948,307 (50) (105,771) (108,341) (2,254) 64,175 15,597 (373,273) 1,438,390 293,995 1,732,385


CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019



Year ended Year ended31 December

201931 December

2018Note $’000 $’000

Cash Flows from Operating ActivitiesLoss before taxation (219,970) (48,594)Adjustments for:Amortisation of intangible assets 3, 31 16,316 16,309Depreciation of property, plant and equipment, investment properties and

right-of-use assets 31 118,928 99,459Impairment loss on goodwill 100,100 –Loss on disposal of property, plant and equipment 28 2,216 221Net impairment of financing receivables 9, 31 53,244 41,579Net (reversal)/impairment of trade and other receivables 14, 31 (551) 5,345Loss on sales of foreclosed assets 12,366 15,754Reversal of allowance for inventories obsolescence 13, 31 (66) (73)Provision for employees’ benefits 21, 31 6,559 5,776Write off of other payable 28 – (1,851)Gain on dilution from a subsidiary to associate 28 – (464)Gain on disposal from subsidiaries (255) –(Gain)/loss on disposal of investment properties (358) 3,001Reversal of allowance for foreclosed assets 25, 31 (350) (1,903)Gain on dilution from associate to unquoted equity investments 28 – (16,181)Interest expense 30 186,240 136,690Interest income 28 (27,859) (22,732)Share of associate companies’ results 3,744 14,473

Operating profit before working capital changes 250,304 246,809Increase in land inventories (587) (2,888)Decrease/(increase) in other inventories 98,216 (112,350)Increase in operating receivables (70,862) (296,461)(Decrease)/increase in operating payables and contract liabilities (21,557) 180,983

Cash generated from operating activities 255,514 16,093Income tax paid (73,356) (79,590)Interest paid (221,416) (220,722)Interest received 8,382 7,860Employee benefit paid 21 (1,302) (1,234)

Net cash used in operating activities (32,178) (277,593)

Cash Flows from Investing ActivitiesAcquisition of intangible assets (142) (92)Acquisition of property, plant and equipment (438,910) (222,981)Acquisition of investment properties (40,100) (4,707)Dividend from associates 2,023 5,560Proceeds from disposal of property, plant and equipment 5,882 2,898Proceeds from disposal of investment properties 33 –Acquisition of a subsidiary, net of cash acquired A (29,602) –Disposal of subsidiaries, net of cash disposed off B 495 –Proceeds from sale of equity instruments at fair value through

other comprehensive income 144,943 –Addition in investments in associates (39,320) (10,992)Interest received on and proceeds from restricted cash and time deposits (105) 254

Net cash used in investing activities (394,803) (230,060)

CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019


Year ended Year ended31 December

201931 December

2018Note $’000 $’000

Cash Flows from Financing ActivitiesProceeds from issuance of new shares 16 10,239 –Proceeds from issuance of debt securities C – 209,331Repayment of debt securities C (195,951) (82,917)Payment of principal portion of lease liabilities C (3,625) –Purchase of treasury shares 17 – (50)Proceeds from additional capital stock contribution of NCI 21,794 5,249Proceeds from borrowings C 4,062,642 3,538,286Repayment of borrowings C (3,467,432) (3,185,861)Dividends paid to non-controlling interests (2,450) (376)

Net cash generated from financing activities 425,217 483,662

Decrease in cash and cash equivalents (1,764) (23,991)Cash and cash equivalents at beginning of year 228,879 258,441Effect of currency translation on cash and cash equivalents 3,409 (5,571)

Cash and cash equivalents at end of year 15 230,524 228,879

Note A: Acquisition of subsidiaries

On 25 June 2019, the Group acquired 97.5% of equity interest in PT Prima Sarana Gemilang (“PT PSG”). As a result, the

Group’s effective interest in PT PSG increased from 1.5% to 98.99%, granting it control of PT PSG. PT PSG engages in coal

mining contractor which has significant interest in the Group’s heavy equipment products. The acquisition of PT PSG will

allow the Group to achieve synergy between PT PSG and the Group on the heavy equipment segment.

Details of the consideration paid, assets acquired, liabilities assumed, and goodwill arising, and the effects on the cash flows

of the group are as follows:

The Group2019$’000

Purchase considerationCash 28,560

Total purchase consideration 28,560

Identifiable assets acquired and liabilities assumed at fair valueCash and cash equivalents 104Trade and other receivables 28,145Inventories 3,611Property, plant and equipment 63,235Deferred tax assets 5,358Loan and borrowings (22,360)Trade and other payables (92,033)Current tax liabilities (1,592)

Identifiable net liabilities assumed (15,532)Add: Non-controlling interests 156

(15,376)




Note A: Acquisition of subsidiaries (Cont’d)

The Group

2019

$’000

Goodwill arising on acquisition

Consideration transferred 28,560

Less: Fair value of identifiable net liabilities assumed, net of non-controlling interests (15,376)

Goodwill arising on acquisition 43,936

Effects on cash flows of the Group

Cash consideration paid 28,560

Less: Cash and cash equivalents in acquiree (104)

Net cash outflows on acquisition 28,456

On 26 December 2019, the Group converted the convertible bond issued by PT Jasa Kencana Utama (“PT JKU”) for

12,500,000,000 new shares in PT JKU, representing 99.01% of the enlarged share capital. The Group took control of PT

JKU based on the Preferential Rights Agreement signed on 30 April 2019. PT JKU engages in E-commerce and contract

services in forestry sector. The acquisition of PT JKU will expand the Group’s business in E-commerce platform and contract

services in forestry.

Details of the consideration paid, assets acquired, liabilities assumed, and goodwill arising and the effects on the cash flows

of the Group are as follows:

The Group2019$’000

Purchase considerationCash 1,211

Total purchase consideration 1,211

Identifiable assets acquired and liabilities assumed at fair valueCash and cash equivalents 66Trade and other receivables 4,024Inventories 51Property, plant and equipment 8,645Investment properties 6,411Other non-current asset 53,471Loan and borrowings (30,236)Trade and other payables (41,365)Current tax liabilities (12)

Identifiable net assets acquired 1,055Add: Non-controlling interests (10)

1,045




Note A: Acquisition of subsidiaries (Cont’d)

The Group

2019

$’000

Goodwill arising on acquisition

Consideration transferred 1,211

Less: Fair value of identifiable net assets acquired, net of non-controlling interests (1,045)

Goodwill arising on acquisition 166

Effects on cash flows of the Group

Cash consideration paid 1,211

Less: Cash and cash equivalents in acquiree (66)

Net cash outflows on acquisition 1,145

Note B: Disposal of subsidiaries

On 6 November 2019, the Group disposed the entire equity interest in PT Bumi Bintan Abadi and its subsidiaries (“PT BBA

Group”) as the proposed joint property development between PT BBA Group and the investors did not materialise.

Details of the disposal are as follows:

The Group

2019

$’000

Carrying amounts of net assets over which control was lost

Current assets 732

Current liabilities (492)

240

Gain on disposal

Total consideration received 495

Less: Net assets derecognised (240)

255

Effect of the disposal on cash flows

Cash consideration 495

Cash balance in subsidiaries disposed off –

Net cash inflows arising on disposal 495

The gain on disposal of subsidiaries is recorded within “other income” in the Consolidated Statement of Comprehensive

Income – Profit or Loss.




Note C

The following is the disclosures of the reconciliation of items for which cash flows have been classified as financing activities,

excluding equity items.

Cash flows Non-cash flows

As at

1 January

2019 Proceeds Repayment

Interest

paid

Interest

expenses

The effect

of changes

In foreign

rates

As at

31 December

2019

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Borrowings

(Note 19) 2,440,536 4,062,642 (3,467,432) (199,139) 164,069 100,068 3,100,744

Debt securities

(Note 20) 358,797 – (195,951) (22,277) 20,499 9,775 170,843

Lease liabilities

(Note 23) 6,494* 14,940 (3,625) – 1,672 119 19,600

* adoption of SFRS(I) 16, Leases

The following is the disclosures of the reconciliation of items for which cash flows have been, classified as financing activities,

excluding equity items.

Cash flows Non-cash flows

As at

1 January

2018 Proceeds Repayment

Interest

paid

Interest

expenses

The effect

of changes

In foreign

rates

As at

31 December

2018

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Borrowings

(Note 19) 2,020,755 3,538,286 (3,185,861) (159,284) 105,872 120,768 2,440,536

Debt securities

(Note 20) 255,702 209,331 (82,917) (61,438) 30,818 7,301 358,797




1 General information

The Company is incorporated and domiciled in Singapore with its registered office and the principal place of business

at 3 HarbourFront Place #16-01 HarbourFront Tower Two, Singapore 099254. The Company is listed on the Mainboard

of Singapore Exchange Securities Trading Limited (“SGX-ST”).

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are disclosed

in Note 7 to the financial statements.

The financial statements of the Group and the Company for the financial year ended 31 December 2019 were authorised

for issue in accordance with a resolution of the Directors on the date of the Directors’ statement.

2(a) Basis of preparation

The financial statements are prepared in accordance with the provisions of the Companies Act, Chapter 50 (the “Act”),

and Singapore Financial Reporting Standards (International) (“SFRS(I)”) including related Interpretations promulgated

by the Accounting Standards Council (“ASC”). The financial statements have been prepared under the historical cost

convention except as disclosed in the accounting policies below.

The financial statements are presented in Singapore Dollar which is the Company’s functional currency. All financial

information, presented in Singapore Dollar, is rounded to the nearest thousand ($’000) unless otherwise stated.

The preparation of the financial statements in conformity with SFRS(I) requires the use of judgements, estimates and

assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities

at the date of the financial statements and the reported amounts of revenues and expenses during the financial year.

Although these estimates are based on management’s best knowledge of current events and actions, actual results

may differ from those estimates.

The critical accounting estimates and assumptions used and areas involving a significant judgement are described

below.

Significant judgements used in applying accounting policies

(a) Income taxes (Note 32)

The Group has exposure to income taxes in several jurisdictions. Significant judgement is involved in determining

the group-wide provision for income taxes. There are certain transactions and computations for which the

ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities

for expected tax issues based on estimates of whether additional taxes will be due.

Where the final tax outcome of these matters is different from the amounts that were initially recognised, such

differences will impact the income tax and deferred tax provisions in the period in which such determination

is made.

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019


2(a) Basis of preparation (Cont’d)

Significant judgements used in applying accounting policies (Cont’d)

(b) Determination of cash-generating units (CGU)

A CGU is defined as the smallest identifiable group of assets that generates cash inflows that are largely

independent of the cash inflows from other assets or groups of assets. Significant judgement is required

by management to determine whether multiple assets should be grouped to form a CGU. Management has

identified the appropriate CGU level to be either at the business segment or at the entity level.

(c) Classification of properties as investment properties (Note 6)

The Group classifies certain buildings and improvements as investment properties as these are leased out

to earn rental income. The Group has assessed and determined that an insignificant portion of investment

properties is held for own use in the supply of building management services and/or for administration purposes.

(d) Classification of property leases as operating lease (as lessor) (Note 35)

The Group has entered into commercial property leases on its investment properties. The Group has determined

that it retains all the significant risks and rewards of ownership of these properties which are leased out on

operating leases. The carrying value of the Group’s operating leases (as lessor) as of 31 December 2019 is

S$104,709,000 (2018 – S$100,215,000).

(e) Determination of functional currency

The Group measures foreign currency translation in the respective currencies of the Company and its

subsidiaries. In determining the functional currencies of the entities in the Group, judgement is required to

determine the currency that mainly influences sales prices for goods and services and of the country whose

competitive forces and regulations mainly determines the sales prices of its goods and services. The functional

currencies of the entities in the Group are determined based on management’s assessment of the economic

environment in which the entities operate and the entities’ process of determining sales prices.

(f) Allowance for expected credit losses (ECL) of financing receivables (Note 9) and trade and other receivables

(Note 14)

Allowance for ECL of receivables are based on assumptions about risk of default and expected loss rates. The

Group uses judgement in making these assumptions and selecting the inputs to the ECL calculation, based

on the Group’s past collection history, existing market conditions as well as forward looking estimates at each

reporting date. Probability of default constitutes a key input in measuring ECL. Probability of default is an

estimate of the likelihood of default over a given time horizon, the calculation of which includes historical data,

current market conditions, assumptions and expectations of future conditions.





(f) Allowance for expected credit losses (ECL) of financing receivables (Note 9) and trade and other receivables

(Note 14) (Cont’d)

For financing receivables and non-trade receivables, the Group and the Company apply the general approach

to determine ECL. ECL is measured as an allowance equal to 12-month ECL for stage-1 (low credit risk) assets,

or lifetime ECL for stage-2 (deterioration in credit risk) or stage-3 (credit impaired) assets. An asset moves

from stage-1 to stage-2 when its credit risk increases significantly and subsequently to stage-3 as it becomes

credit-impaired. In assessing whether credit risk has significantly increased, the Group and the Company

consider qualitative and quantitative reasonable and supportable forward looking information. Lifetime ECL

represents ECL that will result from all possible default events over the expected life of a financial instrument

whereas 12-month ECL represents the portion of lifetime ECL expected to result from default events possible

within 12 months after the reporting date.

For receivables which are trade in nature, the Group and the Company apply the simplified approach and

uses a provision matrix to calculate ECL. The provision rates are based on days past due for groupings of

various customer segments that have similar loss patterns. The provision matrix is initially based on the Group

and the Company’s historical observed default rates. The Group and the Company will calibrate the matrix to

adjust historical credit loss experience with current market conditions and forward-looking information. The

assessment of the correlation between historical observed default rates, forecast economic conditions and ECL

is a significant estimate. The amount of ECL is sensitive to changes in circumstances and forecast economic

conditions.

The carrying amount of the Group’s financing receivables as at 31 December 2019 is S$1,394,814,000

(2018 – S$1,199,723,000).

The carrying amounts of the Company’s and the Group’s trade and other receivables as at 31 December 2019

amount to S$76,960,000 (2018 – S$81,393,000) and S$674,981,000 (2018 – S$703,775,000) respectively. A

decrease of 10% in the estimated future cash inflows will not lead to further allowance for impairment on the

Group’s financing and trade and other receivables.

(g) Deferred tax assets (Note 10)

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit

will be available against which the losses can be utilised. Management judgements are required to determine

the amount of deferred tax assets that can be recognised based upon the likely timing and the level of future

taxable profits together with future tax planning strategies. The carrying amount of the Group’s deferred tax

assets as at 31 December 2019 are S$41,079,000 (2018 – S$34,542,000).





(h) Going concern

As at 31 December 2019, the Company’s current liabilities exceeded its current assets by S$413,037,000

(2018 – S$346,467,000). The Company’s net current liability position is mainly due to loans of S$385,047,000

(2018: S$362,079,000) (Note 19) and amount owing to its subsidiaries of S$69,278,000 (2018 – S$40,776,000)

(Note 24). Excluding the loans and amount owing to its subsidiaries, the Company’s net current asset is

S$41,288,000 (2018 – S$56,388,000) as at 31 December 2019. The financial statements have been prepared

on a going concern basis as the Company is able to meet its current liabilities obligation for the next twelve

months either through the dividend from its subsidiaries, financing through capital market or the subsidiaries

not to recall the loans under the instruction from the Company.

As at 31 December 2019, the Group has cash and cash equivalents (Note 15) of S$230,524,000 (2018 –

S$228,879,000) and net current assets of S$142,724,000 (2018 – S$265,056,000) which is able to support

its working capital requirements. The Group has outstanding borrowings and debts securities (Notes 19 and

20) of S$1,678,107,000 (2018 – S$1,605,898,000) as at 31 December 2019 which is due within 12 months

after end of reporting period.

The Group is of the view that the preparation of financial statements on a going concern basis is appropriate

for the following reasons:

• the Group has unutilised credit facilities amounting to approximately S$2.08 billion (2018 – S$1.66 billion)

and is able to raise funds through bank borrowings and capital market; and

• the Group is able to collect its total trade receivables (including financing receivables) as they fall due

to settle its current liabilities.

(i) Determination of the lease term (Note 23)

In determining the lease term, management considers all facts and circumstances that create an economic

incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods

after termination options) are only included in the lease term if the lease is reasonably certain to be extended

(or not terminated). The lease term is reassessed if an option is actually exercised (or not exercised) or the

Group becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised

if a significant event or a significant change in circumstances occurs, which affects the assessment, and that is

within the control of the lessee. For leases of premises, plant and equipment, and motor vehicles, the following

factors are normally the most relevant:

• If there are significant penalties to terminate (or not extend), the Group is typically reasonably certain

to extend (or not terminate).

• If any leasehold improvements are expected to have a significant remaining value, the Group is typically

reasonably certain to extend (or not terminate).

• Otherwise, the Group considers other factors including historical lease durations and the costs and

business disruption required to replace the leased asset.

As at 31 December 2019, potential future cash outflows of S$1,785,196 (undiscounted) have not been included

in the lease liability because it is not reasonably certain that the leases will be extended (or not terminated).




Critical accounting estimates and assumptions used in applying accounting policies

(a) Pension and employee benefits (Note 21)

The determination of the Group’s obligation cost for pension and employee benefits liabilities is dependent on

its selection of certain assumptions used by the independent actuaries in calculating such amounts. Those

assumptions include among others, discount rates, future annual salary increase, annual employee turn-over

rate, disability rate, retirement age and mortality rate. Actual results that differ from the Group’s assumptions

are recognised in profit or loss as and when they occurred. While the Group believes that its assumptions are

reasonable and appropriate, significant changes in the Group’s assumptions may materially affect its estimated

liabilities for pension and employee benefits and net employee benefits expense. The carrying amount of

employee benefit liabilities as at 31 December 2019 amounts to S$43,867,000 (2018 – S$36,709,000).

If the discount rate decreases by 1% from management’s estimates, the present value of the pension and

employee benefits obligation will increase by S$2,371,000 (2018 – S$1,440,000).

(b) Depreciation of property, plant and equipment (Note 4)

Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives.

Management estimates the useful lives of these property, plant and equipment to be within 1 to 80 years.

Changes in the expected level of usage and technological development could impact the economic useful lives

and residual values of these assets, therefore future depreciation charges could be revised.

The carrying amount of the Company’s and the Group’s property, plant and equipment as at 31 December

2019 are S$158,000 (2018 – S$310,000) and S$1,153,404,000 (2018 – S$769,129,000) respectively. If the

depreciation of the property, plant and equipment increases/decreases by 10%, the Group’s loss for the year

will increase/decrease by S$6,316,000 (2018 – S$7,051,000).

(c) Amortisation of intangible assets (Note 3)

Intangible assets are accounted for using the cost model with the exception of goodwill. Capitalised costs are

amortised on a straight-line basis over their estimated useful lives for those with finite useful lives. Management

estimates the useful lives of these intangible assets to be within 3 to 20 years. After initial recognition, they are

carried at cost less accumulated amortisation and accumulated impairment losses, if any. In addition, they are

subject to impairment testing if there are any indicators of impairment. Indefinite life intangibles are subject to

annual impairment testing and more frequently, if there are any indicators of impairment.

Intangibles assets are written off where, in the opinion of the management, no further economic benefits

are expected to arise. The carrying amounts of the Company’s and the Group’s intangible assets,

excluding goodwill, as at 31 December 2019 are S$27,000 (2018 – S$62,000) and S$216,602,000

(2018 – S$232,776,000) respectively. If the amortisation of intangible assets increases/decreases by 10%, the

Group’s loss for the year will increase/decrease by S$1,632,000 (2018 – S$1,631,000).




Critical accounting estimates and assumptions used in applying accounting policies (Cont’d)

(d) Depreciation of investment properties (Note 6)

Investment properties are accounted for using the cost model and are depreciated on a straight-line basis

over their estimated useful lives and impaired if necessary. Management estimates the useful lives of these

investment properties to be within 3 to 30 years. The carrying value of the investment properties are reviewed

when events or changes in circumstances indicate the carrying value may not be recoverable.

The carrying amount of the Group’s investment properties as at 31 December 2019 is S$101,775,000

(2018 – S$182,203,000). If the depreciation of the investment properties increases/decreases by 10%, the

Group’s loss for the year will increase/decrease by S$2,824,000 (2018 – S$2,895,000).

(e) Estimation of the incremental borrowing rate (“IBR”) (Note 23)

For the purpose of calculating the right-of-use asset and lease liability, an entity applies the interest rate implicit

in the lease (“IRIIL”) and, if the IRIIL is not readily determinable, the entity shall use its IBR applicable to the

lease asset.

The IBR is the rate of interest that the entity would have to pay to borrow over a similar term, and with a similar

security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic

environment. For most of the leases whereby the Group is the lessee, the IRIIL is not readily determinable.

Therefore, the Group estimates the IBR relevant to each lease asset by using observable inputs (such as market

interest rate and asset yield) when available, and then making certain lessee specific adjustments (such as a

group entity’s credit rating). The carrying amount of the Group’s right-of-use assets and lease liabilities are

disclosed in Notes 5 and 23 respectively.

An increase/decrease of 50 basis points in the estimated IBR will not significantly decrease/increase the Group’s

right-of-use assets and vice versa, the lease liabilities.

(f) Fair value of financial instruments

The Group carries certain financial assets and liabilities at fair value. Where the fair values of financial assets

and financial liabilities recorded on the statements of financial position cannot be derived from active markets,

they are determined using a variety of valuation techniques that include the use of the mathematical models.

The inputs to these models are derived from observable market data where possible. Where observable data

are not available, judgement are required to establish the fair value. The judgement includes considerations of

liquidity and model inputs such as volatility and discount rate, prepayment rates and default rate assumptions,

which fair value would differ if the Group utilised different valuation methodology. Any changes in fair values of

these financial assets and liabilities would affect directly the Group’s profit or loss.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation

techniques as follows:

• Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 : inputs other than quoted prices included in Level 1 that are observable for the asset or liability,

either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 : inputs for the asset or liability that are not based on observable market data (unobservable

inputs).





(f) Fair value of financial instruments (Cont’d)

If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of

the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the

fair value hierarchy as the lowest level input that is significant to the entire measurement (with Level 3 being

the lowest).

The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period

during which the change has occurred.

Further information about the assumptions made in measuring the fair values is included in the following note:

• Note 26 – Derivative financial instruments

The carrying amount of the Group’s derivative financial assets as at 31 December 2019 is S$2,745,000

(2018 – S$23,337,000) and the carrying amount of the Group’s derivative financial liabilities as at

31 December 2019 is S$41,424,000 (2018 – S$1,139,000).

If the fair value of the Group’s derivative financial assets and derivative financial liabilities increase/decrease

by 10%, the Group’s other comprehensive loss for the year will decrease/increase by S$3,870,000

(2018 – S$2,220,000).

(g) Valuation of unquoted equity instruments (Note 11)

The Group owns unquoted equity investments in shares and elected to measure these equity instruments at

FVOCI due to the Group’s intention to hold these equity instruments for long-term appreciation.

These investments, stated at their fair values (Level 3 of the fair value hierarchy), are based on management

valuations using external valuers. Estimating the fair value is a complex process involving judgements and

estimates regarding various inputs and underlying assumptions. This is due to the nature of the underlying

assets comprising many categories of assets and liabilities recorded in the statement of financial position of

the investee. The valuation of these investments is determined using the adjusted net assets method that

involves the use of unobservable inputs. The valuations are sensitive to key assumptions applied in deriving

at the significant unobservable inputs i.e. a small change in the assumptions may have a significant impact to

the valuation.

The fair value amounts ascribed to these investments is disclosed in Note 11. The carrying amount of the

Group’s equity instruments at FVOCI as at 31 December 2019 is S$132,793,000 (2018: S$251,167,000).

An increase/decrease of 10% in the investments’ net asset value, the Group’s unquoted equity instruments

will increase/decrease by S$13,280,000 (2018 – S$25,120,000).





(h) Allowance for decline in market values and obsolescence of land inventories (Note 12) and other inventories

(Note 13)

Allowance for decline in market values and obsolescence of inventories is estimated based on the best available

facts and circumstances including but not limited to the inventories’ own physical conditions, their market selling

prices, estimated costs of completion and estimated costs to be incurred for their sales. The provisions are

re-evaluated and adjusted as additional information received affects the amount estimated.

The carrying amount of the Group’s land inventories and other inventories as at 31 December 2019 are

S$595,241,000 (2018 – S$594,654,000) and S$274,606,000 (2018 – S$359,552,000) respectively. If the net

realisable value of the inventories decreases by 10% from management’s estimates, the Group’s loss for the

year will increase by S$580,000 (2018 – S$428,000).

(i) Impairment of goodwill (Note 3)

Goodwill is tested for impairment annually and whenever there is indication that the goodwill may be impaired.

The assessment of impairment of goodwill is determined based on the recoverable amount of the Group’s

smallest cash-generating units (“CGU”), either at the business segment or entity level. The recoverable amount

of the CGU is determined based on value-in-use calculation.

This calculation uses cash flow projections based on financial budgets approved by management covering a

five-year period and use of estimates (Note 3). The carrying amount of goodwill as at 31 December 2019 is

S$427,460,000 (2018 – S$483,458,000).

A decrease of 5% in the gross profit margin or in the growth rate, or an increase of 50 basis points in the

discount rate, as applied in the VIU calculations, will not lead to further impairment loss recognised on the

goodwill.

(j) Impairment in investment in subsidiaries and associates (Notes 7 and 8)

Determining whether investments in subsidiaries and associates are impaired requires an estimation of the

value-in-use of that investment. The value-in-use calculation requires the Company and the Group to estimate

the future cash flows expected from the cash generating units and an appropriate discount rate in order to

calculate the present value of the future cash flows. Management has evaluated the recoverability of the

investments based on such estimates. If the present value of estimated future cash flows decreased by 1%

from management’s estimates, is not likely to materially affect the carrying amount.

The carrying amount of the Company’s investment in subsidiaries and the Group’s investment in associates

as at 31 December 2019 are S$2,460,620,000 (2018 – S$2,537,174,000) and S$149,940,000 (2018 –

S$116,269,000) respectively.



2(b) Adoption of new and revised SFRS(I) effective in 2019

New SFRS(I) and amendments in 2019

On 1 January 2019, the Group has applied the following standards and amendments for the first time for their annual

reporting period commencing 1 January 2019.

Reference Description

Effective date

(Annual periods

beginning on or after)

SFRS(I) 16 Leases 1 January 2019

SFRS(I) INT 23 Uncertainty over Income Tax Treatments 1 January 2019

SFRS(I) 9 Amendments to SFRS(I) 9: Prepayment Features with

Negative Compensation

1 January 2019

SFRS(I) 1-19 Amendments to SFRS(I) 1-19: Plan Amendment,

Curtailment or Settlement

1 January 2019

SFRS(I) 1-28 Amendments to SFRS(I) 1-28: Long-term Interests in

Associates and Joint Ventures

1 January 2019

Annual Improvements to SFRS(I) 2015 – 2017 Cycle

SFRS(I) 1-12 Amendments to Income Tax Consequences of

Payments on Financial Instruments Classified as Equity

1 January 2019

SFRS(I) 1-23 Amendments to Borrowing Costs Eligible

for Capitalisation

1 January 2019

The adoption of these new or amended SFRS(I) and INT SFRS(I) did not result in substantial changes to the Group’s

accounting policies and had no material effect on the amounts reported for the current or prior financial years, except

as discussed below:

SFRS(I) 16 Leases

SFRS(I) 16 Leases supersedes SFRS(I) 1-17 Leases, SFRS(I) INT 4 Determining whether an Arrangement contains a

Lease, SFRS(I) INT 1-15 Operating Leases – Incentives and SFRS(I) INT 1-27 Evaluating the Substance of Transactions

involving the Legal Form of a Lease, and pronounces new or amended requirements with respect to lease accounting.

For lessee accounting, SFRS(I) 16 introduces significant changes by removing the distinction between operating

and finance lease and requiring the recognition of a right-of-use asset and a lease liability at commencement for all

leases, except for short-term leases and leases of low-value assets when such recognition exemptions are adopted.

For lessor accounting, the requirements have remained largely unchanged. The impact of the adoption of SFRS(I) 16

on the Group’s financial statements are discussed below.

The date of initial application of SFRS(I) 16 for the Group is 1 January 2019. The Group has elected to transition to

SFRS(I) 16 using the cumulative catch-up (or modified retrospective) approach requires the Group to recognise the

cumulative effect of initially applying SFRS(I) 16 at the date of initial application, without restatement of comparatives

under SFRS(I) 1-17.



2(b) Adoption of new and revised SFRS(I) effective in 2019 (Cont’d)

SFRS(I) 16 Leases (Cont’d)

(a) Definition of a lease

The new definition of a lease under SFRS(I) 16 mainly relates to the concept of ‘control’ that determines

whether a contract contains a lease on the basis of whether the customer has the right to control the use of

an identified asset for a period of time in exchange for consideration, which is in contrast to the concept of

‘risks and rewards’ under SFRS(I) 1-17.

The Group has elected to apply the practical expedient available on transition to SFRS(I) 16 not to reassess

whether a contract is, or contains, a lease. Accordingly, the superseded definition of a lease under SFRS(I) 1-17

continues to be applied to those leases entered into, or modified, before 1 January 2019, and the Group applies

the new definition of a lease and related guidance set out in SFRS(I) 16 only to those lease contracts entered

into, or modified, on or after 1 January 2019. After the transition to SFRS(I) 16, the Group shall reassess whether

a contract is, or contains, a lease only if the terms and conditions of the contract are changed.

The new requirements for identifying a lease under SFRS(I) 16 do not change significantly the scope of contracts

that will meet the definition of a lease for the Group.

(b) Lessee accounting

(i) Former operating leases

Before the adoption of SFRS(I) 16, the Group’s non-cancellable operating lease payments in future

reporting periods for office premises, warehouse and land rental, rental of transportation equipment

and motor vehicles, were not recognised as liabilities in the statement of financial position but were

disclosed as commitments in the notes to the financial statements, and these lease payments were

reported as rental expenses in profit or loss over the lease term on a straight-line basis and presented

under operating activities in the statement of cash flows. Under SFRS(I) 16, the Group recognises

right-of-use assets and lease liabilities in the statement of financial position for these outstanding lease

payments, reports depreciation of right-of-use assets and interest expense on lease liabilities in profit

or loss, and presents these lease payments as principal repayment and interest paid separately under

financing activities in the statement of cash flows.

Under SFRS(I) 16, lease incentives are recognised as part of the measurement of the right-of-use assets

and lease liabilities whereas under SFRS(I)1-17, they resulted in the recognition of a lease incentive

liability, amortised as a reduction of rental expenses on a straight-line basis.

The Group has elected, as a practical expedient of SFRS(I) 16, not to separate non-lease components

from lease components for all classes of underlying assets and instead account for each lease

component and any associated non-lease components as a single lease component, except if the

non-lease component is an embedded derivative according to SFRS(I) 9.

For short-term leases and leases of low-value assets, the Group has elected for exemption under

SFRS(I) 16 from recognising their right-of-use assets and lease liabilities, and to report their lease

expenses in profit or loss on a straight-line basis.





(b) Lessee accounting (Cont’d)

(i) Former operating leases (Cont’d)

On 1 January 2019, the Group has applied the following SFRS(I) 16 transition provisions under the

cumulative catch-up approach for each lease, or each portfolio of leases with reasonably similar

characteristics, formerly classified as operating lease under SFRS(I) 1-17:

• recognises a lease liability at the present value of the remaining lease payments using the lessee’s

incremental borrowing rate for the underlying lease asset;

• recognises a right-of-use asset, on a lease-by-lease basis, for office premises, warehouse and

land rental, rental of transportation equipment and motor vehicles, at an amount equal to the

lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to

that lease recognised in the statement of financial position immediately before the date of initial

application; and

• applies SFRS(I) 1-36 Impairment of Assets to perform an impairment review of the right-of-use

asset.

The Group has adopted the following SFRS(I) 16 practical expedients when applying the cumulative

catch-up transition approach to leases formerly classified as operating lease under SFRS(I) 1-17:

• applies a single discount rate to a portfolio of leases with reasonably similar characteristics;

• elects not to recognise the right-of-use asset and lease liability for a lease with lease term ending

within twelve months of the date of initial application;

• excludes initial direct costs from the measurement of the right-of-use asset at the date of initial

application; and

• uses hindsight for determining the lease term when the contract contains options to extend or

terminate the lease.

(ii) Former finance leases

On 1 January 2019, with regards to the Group’s leases of transportation equipment and motor vehicles

that were formerly classified as finance lease under SFRS(I) 1-17, the carrying amounts of the leased

assets (in property, plant and equipment) and obligations under finance lease immediately before the date

of initial application become respectively the opening balance of the carrying amounts of right-of-use

assets and lease liabilities under SFRS(I) 16. Subsequently, the Group accounts for these right-of-use

assets and lease liabilities in accordance with SFRS(I) 16.





(c) Lessor accounting

SFRS(I) 16 has not changed substantially how the Group as lessor accounts for leases, except when it is the

intermediate lessor of sublease. Under SFRS(I) 16, the Group continues to classify leases, where it is the lessor,

as either finance lease or operating lease and to account for the two types of leases differently. However,

SFRS(I) 16 changes and expands the disclosures required, in particular, regarding how the Group as lessor

manages the risks arising from its residual interest in leased assets.

Intermediate lessor of sublease

The Group subleases to a non-related party an office premise which the Group leases under a separate head

lease arrangement. Prior to the adoption of SFRS(I) 16, the sublease was classified as an operating lease

because the head lease was an operating lease. Under SFRS(I) 1-17, the Group as intermediate lessor recorded

rental income in respect of the sublease on a straight-line basis over the term of the sublease and recorded

rental expense in respect of the head lease on a straight-line basis over the term of the head lease.

Under SFRS(I) 16, lessor accounting by the Group as intermediate lessor depends on the classification of the

sublease with reference to the right-of-use asset arising from the head lease rather than the underlying asset.

On 1 January 2019, the Group has reassessed the classification of the sublease to continue to be an operating

lease based on the remaining contractual terms and condition of the head lease.

The amendments did not have any significant impact on the Group’s financial statements when the Group is

intermediate lessor.

(d) Deferred tax effects on adoption of SFRS(I) 16

In certain jurisdictions that the Group operates in, tax deductions are available only for the lease payments as

they are paid, and no tax deduction is allowed for the leased asset depreciation or finance cost. On 1 January

2019, these tax circumstances give rise to temporary differences on initial recognition of both the right-of-use

asset and lease liability. Management has assessed the deferred tax adjustments arising from the adoption of

SFRS(I) 16 and there is no material net impact on the financial statements of the Group.

The effects of adoption of SFRS(I) 16 on the Group’s financial statements are disclosed in Note 43.




SFRS(I) INT 23 Uncertainty over Income Tax Treatments

The Group has adopted SFRS(I) INT 23 for the first time in the current year. SFRS(I) INT 23 sets out how to determine

the accounting tax position when there is uncertainty over income tax treatments. The Interpretation requires the

Group to:

• determine whether uncertain tax positions are assessed separately or as a group; and

• assess whether it is probable that a tax authority will accept an uncertain tax treatment used, or proposed to

be used, by an entity in its income tax filings, as follows:

– if yes, the Group should determine its accounting tax position consistently with the tax treatment used

or planned to be used in its income tax filings; or

– if no, the Group should reflect the effect of uncertainty in determining its accounting tax position using

either the most likely amount or the expected value method.

There is no material impact to the Group’s and the Company’s financial statements.

2(c) SFRS(I) issued but not yet effective

Certain new accounting standards and interpretations have been published that are not mandatory for 31 December

2019 reporting periods and have not been early adopted by the Group.

Reference Description

Effective date

(Annual periods

beginning on or after)

SFRS(I) 1-1 and SFRS(I) 1-8 Amendments to SFRS(I) 1-1 and SFRS(I) 1-8: Definition

of Material

1 January 2020

SFRS(I) 3 Amendments to SFRS(I) 3: Definition of a Business 1 January 2020

Various SFRS (I)s Amendments to References to the Conceptual

Framework in SFRS(I) Standards

1 January 2020

SFRS(I) 17 Insurance Contracts 1 January 2021

SFRS(I) 10 and SFRS(I) 1-28 Amendments to SFRS(I) 10 and SFRS(I) 1-28: Sale or

Contribution of Assets between an Investor and its

Associate or Joint Venture

To be determined

Except for the following, the Group expects that the adoption of the other standards and amendments above will have

no material impact on the Group’s financial statements in the period of initial application.



2(c) SFRS(I) issued but not yet effective (Cont’d)

Amendments to SFRS(I) 1-1 and SFRS(I) 1-8: Definition of Material

The amendments clarify the definition of material and how it should be applied by including in the definition guidance.

The new definition of material states that “Information is material if omitting, misstating or obscuring it could reasonably

be expected to influence the decisions that the primary users of general purpose financial statements make on the basis

of those financial statements, which provide financial information about a specific reporting entity.” The amendments

clarify that materiality will depend on the nature or magnitude of information. An entity will need to assess whether

the information, either individually or in combination with other information, is material in the context of the financial

statements. A misstatement of information is material if it could reasonably be expected to influence decisions made

by the primary users.

Amendments to SFRS(I) 3: Definition of a Business

The amendments are changes to Appendix A Defined terms, the application guidance, and the illustrative examples

of SFRS(I) 3 only that:

• clarify that to be considered a business, an acquired set of activities and assets must include, as a minimum,

an input and a substantive process that together significantly contribute to the ability to create outputs;

• narrow the definitions of a business and of outputs by focusing on goods and services provided to customers

and by removing the reference to an ability to reduce costs;

• add guidance and illustrative examples to help entities assess whether a substantive process has been acquired;

• remove the assessment of whether market participants are capable of replacing any missing inputs or processes

and continuing to produce outputs; and

• add an optional concentration test that permits a simplified assessment of whether an acquired set of activities

and assets is not a business.

2(d) Significant accounting policies

(i) Consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries

as at the end of the reporting period. The financial statements of the subsidiaries used in the preparation of

the consolidated financial statements are prepared for the same reporting date as the Company. Consistent

accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intragroup

transactions and dividends are eliminated in full.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control

and continue to be consolidated until the date that such control ceases.

Losses and other comprehensive income are attributable to the non-controlling interests even if that results

in a deficit balance.



2(d) Significant accounting policies (Cont’d)

(i) Consolidation (Cont’d)

Subsidiary and existence of control

A subsidiary is an investee that is controlled by the Group. The Group controls an investee when it is exposed,

or has rights to variable returns from its involvement with the investee and has the ability to affect those returns

through its power over the investee.

Thus, the Group controls an investee if and only if the Group has all of the following:

– power over the investee;

– exposure, or rights to variable returns from its involvement with the investee; and

– the ability to use its power over the investee to affect its returns

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there

are changes to one or more of the three elements of control listed above.

When the Group has less than a majority of the voting rights of an investee, it has power over the investee

when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee

unilaterally. The Group considers all relevant facts and circumstances in assessing whether or not the Group’s

voting rights in an investee are sufficient to give it power, including:

– the size of the Group’s holding of voting rights relative to the size and dispersion of holdings of the

other vote holders;

– potential voting rights held by the Group, other vote holders or other parties;

– rights arising from other contractual arrangements; and

– any additional facts and circumstances that indicate that the Group has, or does not have, the current

ability to direct the relevant activities at the time that decisions need to be made, including voting

patterns at previous shareholders’ meetings.

Non-controlling interests

Non-controlling interests represents the equity in subsidiaries not attributable, directly or indirectly, to owners

of the Company, and are presented separately in the consolidated statement of comprehensive income and

within equity in the consolidated statement of financial position, separately from equity attributable to owners

of the Company.




(i) Consolidation (Cont’d)

Changes in ownership interests in subsidiaries without loss of control

Changes in the Company owners’ ownership interests in a subsidiary that do not result in a loss of control

are accounted for as equity transactions. In such circumstances, the carrying amount of the controlling and

non-controlling interests is adjusted to reflect the changes in their relative interests in the subsidiary. Any

difference between the amount by which the non-controlling interests is adjusted and the fair value of the

consideration paid or received is recognised directly in equity and attributed to owners of the Company.

Changes in ownership interests in subsidiaries resulting in loss of control

When the Group loses control over a subsidiary, it:

– de-recognises the assets (including goodwill) and liabilities of the subsidiary at their carrying amounts

as at that date when control is lost;

– de-recognises the carrying amount of any non-controlling interests;

– de-recognises the cumulative translation differences recorded in equity;

– recognises the fair value of the consideration received;

– recognises the fair value of any investment retained;

– recognises any surplus or deficit in profit or loss; and

– re-classifies the Group’s share of components previously recognised in other comprehensive income

to profit or loss or retained earnings, as appropriate.

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated

as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of

any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of

the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive

income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets

or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as

specified/permitted by applicable SFRS(I)). The investment retained in the former subsidiary at the date when

the control is lost is remeasured to its fair value. This fair value becomes the initial carrying amount for the

purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset.




(ii) Business combination

The Group applies the acquisition method to account for business combinations. The consideration transferred

for the acquisition of a subsidiary comprises:

– the fair values of the assets transferred,

– the liabilities incurred to the former owners of the acquiree,

– the equity interests issued by the Group,

– the fair value of any asset or liability resulting from a contingent consideration arrangement and

– fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are

measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interests

in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interests’

proportionate share of the recognised amounts of acquiree’s identifiable net assets.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted

to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing

rate, being the rate at which a similar borrowing could be obtained from an independent financier under

comparable terms and conditions.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial

liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously

held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising

from such remeasurement are recognised in profit or loss.

(iii) Intangible assets

Intangible assets are accounted for using the cost model with the exception of goodwill. Capitalised costs are

amortised on a straight-line basis over their estimated useful lives for those considered as finite useful lives.

After initial recognition, they are carried at cost less accumulated amortisation and accumulated impairment

losses, if any. In addition, they are subject to annual impairment testing, if there are any indicators of impairment.

Indefinite life intangibles are not amortised but are subject to annual impairment testing.

Intangible assets are written off where, in the opinion of the Directors, no further future economic benefits are

expected to arise.




(iii) Intangible assets (Cont’d)

a. Goodwill

Goodwill on acquisition of subsidiaries on or after 1 January 2010 represents the excess of the

consideration transferred, the amount of any non-controlling interests in the acquiree and the

acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net

identifiable assets acquired.

Goodwill on acquisition of subsidiaries prior to 1 January 2010 and on acquisition of joint ventures and

associated companies represents the excess of the cost of the acquisition over the fair value of the

Group’s share of the net identifiable assets acquired.

Goodwill on subsidiaries and joint ventures is recognised separately as intangible assets and carried at

cost less accumulated impairment losses.

Goodwill on associated companies is included in the carrying amount of the investments.

Gains and losses on the disposal of subsidiaries, joint ventures and associated companies include the

carrying amount of goodwill relating to the entity sold, except for goodwill arising from acquisition prior

to 1 January 2001. Such goodwill was adjusted against retained profits in the year of acquisition and

is not recognised in profit or loss on disposal.

b. Dealerships and distributorships

Dealerships and distributorships are amortised on straight-line basis over their useful life of 20 years.

c. Computer software

Costs relating to computer software acquired, which are not an integral part of related hardware, are

capitalised and amortised on a straight-line basis over their useful life of 3 years.




(iv) Property, plant and equipment and depreciation

Property, plant and equipment, other than construction-in-progress, are stated at cost less accumulated

depreciation and accumulated impairment losses, if any. Depreciation is computed utilising the straight-line

method to allocate the depreciable amount of these assets over their estimated useful lives as follows:

Years

Leasehold land 15 – 80Land improvements 20Landfill 3Building and infrastructures 3 – 30Golf course 36 – 45Utilities plant and machinery 3 – 30Machinery and equipment 3 – 15Vessels and ferry equipment 4 – 15Working wharf 3Transportation equipment and vehicles 3 – 8Medical equipment 7Furniture, fixtures and equipment 1 – 10Office equipment 2 – 5Resort equipment 3 – 5Reservoir 30Telecommunication equipment 10 – 30Leasehold improvements 5

Construction-in-progress is stated at cost. The accumulated costs will be reclassified to the appropriate

property, plant and equipment account when the construction is substantially completed and the asset is ready

for its intended use. No depreciation is provided on construction-in-progress.

Costs incurred in the general overhaul of the main engines of vessels during dry docking are capitalised and

depreciated over 3 to 5 years.

The cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of

the items. Dismantlement, removal or restoration costs are included as part of the cost of property, plant and

equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring

or using the asset. Cost may also include transfers from equity of any gains/losses on qualifying cash flow

hedges of foreign currency purchases of property, plant and equipment.

Subsequent expenditure relating to property, plant and equipment that have been recognised is added to the

carrying amount of the asset when it is probable that future economic benefits, in excess of the standard of

performance of the asset before the expenditure was made, will flow to the Group and the cost can be reliably

measured. Other subsequent expenditure is recognised as an expense during the financial year in which it is

incurred.

For acquisitions and disposals during the financial year, depreciation is provided from the year of acquisition and

to the year before disposal respectively. For acquisitions, less than S$1,000, they are expended as expenses

in the profit or loss. Fully depreciated property, plant and equipment are retained in the books of accounts

until they are no longer in use.

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each

reporting date as a change in estimates.




(v) Investment properties

Investment properties consist of buildings and improvements that are held to earn rental yields, including

portions of buildings which could not be sold separately, and where an insignificant portion is held for use in

the supply of services or for administrative purposes.

The Group applies the cost model. Investment properties are stated at cost less accumulated depreciation,

less any impairment in value similar to that for property, plant and equipment. Such costs include the cost

of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria

are met; and excludes the costs of day to day servicing of an investment property. Depreciation is computed

using the straight-line method over the estimated useful lives of the investment properties of 3 – 30 years, as

applicable for each investment property.

Investment properties are de-recognised when either they have been disposed of or when the investment

property is permanently withdrawn from use and no future economic benefit is expected from its disposal.

On disposal or retirement of an investment property, the difference between any disposal proceeds and the

carrying amount is recognised in the profit or loss.

The carrying value of investment properties are reviewed for impairment when events or changes in

circumstances indicate the carrying value may not be recoverable. If such indication exists and where the

carrying values exceed the estimated recoverable amounts, the assets are written down to their recoverable

amounts.

Transfers are made to investment property when, and only when, there is a change in use, evidenced by

ending of owner-occupation or commencement of an operating lease to another party. Transfers are made

from the investment property when and only when, there is a change in use, evidenced by the commencement

of owner-occupation or commencement of development with a view to sell.

(vi) Investment in subsidiaries

In the Company’s separate financial statements, shares in subsidiaries are stated at cost less allowance for

any impairment losses on an individual subsidiary basis.

(vii) Investment in associates

An associate is an entity over which the Group has the power to participate in the financial and operating policy

decisions of the investee but is not control or joint control of those policies.

The Group accounts for its investments in associates using the equity method from the date on which it

becomes an associate.

On acquisition of the investment, any excess of the cost of the investment over the Group’s share of the net fair

value of the investee’s identifiable assets and liabilities is accounted as goodwill and is included in the carrying

amount of the investment. Any excess of the Group’s share of the net fair value of the investee’s identifiable

assets and liabilities over the cost of the investment is included as income in the determination of the entity’s

share of the associate’s profit or loss in the period in which the investment is acquired.




(vii) Investment in associates (Cont’d)

Under the equity method, the investment in associates are carried in the consolidated statement of financial

position at cost plus post-acquisition changes in the Group’s share of net assets of the associates. The profit or

loss reflects the share of results of operations of the associates. Distributions received from associates reduce

the carrying amount of the investment. Where there has been a change recognised in other comprehensive

income by the associates, the Group recognises its share of such changes in other comprehensive income.

Unrealised gains and loss resulting from transaction between the Group and the associate are eliminated to

the extent of the interest in the associates.

When the Group’s share of losses in associate equals or exceeds its interest in the associate, the Group does

not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

After application of the equity method, the Group determines whether it is necessary to recognise an additional

impairment loss, on the Group’s investment in associate. The Group determines at the end of each reporting

period whether there is any objective evidence that the investment in the associate is impaired. If this is the

case, the Group calculates the amount of impairment as the difference between the recoverable amount of the

associate and its carrying value and recognises the amount in profit or loss.

The financial statements of the associate are prepared as of the same reporting date as the Company unless

it is impracticable to do so. When the financial statements of an associate used in applying the equity method

are prepared as of a different reporting date from that of the Company, adjustments are made for the effects

of significant transactions or events that occur between that date and the reporting date of the Company.

Upon loss of significant influence or joint control over the associate, the Group measures the retained interest

at fair value. Any difference between the fair value of the aggregate of the retained interest and proceeds

from disposal and the carrying amount of the investment at the date the equity method was discontinued is

recognised in profit or loss.

The Group accounts for all amounts previously recognised in other comprehensive income in relation to that

associate on the same basis as would have been required if that associate or joint venture had directly disposed

of the related assets or liabilities.

When an investment in an associate becomes an investment in a joint venture, the Group continues to apply

the equity method and does not remeasure the retained interest.

If the Group’s ownership interest in an associate is reduced, but the Group continues to apply the equity

method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been

recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss

would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.




(viii) Inventories

a. Land

Land inventories are carried at the lower of cost and net realisable value. Cost of land inventories is

recorded at cost. Net realisable value represents the estimated selling price less costs to be incurred

in selling the land.

Cost of land inventories includes cost of land, borrowing costs and other costs directly or indirectly

related to the acquisition and development of the land for sale. These costs are capitalised during the

period such activities that are necessary to get these assets ready for sale are in progress. Capitalisation

of these costs will cease when land development is completed and the land is available for sale.

The costs incurred in the development of the resort and common areas/facilities are allocated

proportionally to the saleable parcels of land. Other land development costs incurred are allocated to

each parcel of land using the specific identification method.

Land inventories are de-recognised when it has been sold as an integral part with sale of land and no

future economic benefit is expected from its disposal. Cost of land infrastructure inventory on sale of

land or loss from disposal is recognised in the profit or loss in the year of sale or disposal.

b. Other inventories

Other inventories are stated at the lower of cost and net realisable value. Cost is generally determined

on a first-in, first-out basis, specific identification and average methods. The cost of finished goods and

work-in-progress comprises goods held for resale, raw materials, labour and an appropriate portion

of overheads. Allowance is made for obsolete, slow moving or defective inventory in arriving at the net

realisable value. Net realisable value is the estimated selling price in the ordinary course of business

less the estimated costs necessary to make the sale.

(ix) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or

equity instrument of another entity.

Financial assets and financial liabilities are offset and the net amount reported in the consolidated statements

of financial position if, and only if, there is a currently enforceable legal rights to offset the recognised amounts

and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.




(x) Financial assets

a. Classification

The Group classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through OCI or through profit or loss),

and

• those to be measured at amortised cost.

The classification depends on the Group’s business model for managing the financial assets and the

contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For

investments in equity instruments that are not held for trading, this will depend on whether the Group

has made an irrevocable election at the time of initial recognition to account for the equity instruments

at fair value through other comprehensive income (FVOCI).

The Group reclassifies debt instruments when and only when its business model for managing those

assets changes.

b. Recognition and de-recognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which

the Group commits to purchase or sell the asset. Financial assets are de-recognised when the rights

to receive cash flows from the financial assets have expired or have been transferred and the Group

has transferred substantially all the risks and rewards of ownership.

c. Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial

asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the

acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed

in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether

their cash flows are solely payment of principal and interest.




(x) Financial assets (Cont’d)

c. Measurement (Cont’d)

Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model for managing

the asset and the cash flow characteristics of the asset. There are three measurement categories into

which the Group classifies its debt instruments:

• Amortised cost: Assets that are held for collection of contractual cash flows where those cash

flows represent solely payments of principal and interest are measured at amortised cost. Interest

income from these financial assets is included in finance income using the effective interest rate

method. Any gain or loss arising on de-recognition is recognised directly in profit or loss and

presented in other gains/(losses) together with foreign exchange gains and losses. Impairment

losses are presented as separate line item in the statement of profit or loss.

• FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial

assets, where the assets’ cash flows represent solely payments of principal and interest, are

measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the

recognition of impairment gains or losses, interest income and foreign exchange gains and

losses which are recognised in profit or loss. When the financial asset is de-recognised, the

cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss

and recognised in other gains/(losses). Interest income from these financial assets is included

in finance income using the effective interest rate method. Foreign exchange gains and losses

are presented in other gains/(losses) and impairment expenses are presented as separate line

item in the statement of profit or loss.

• FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A

gain or loss on a debt instrument that is subsequently measured at FVPL is recognised in profit

or loss and presented net within other gains/(losses) in the period in which it arises.

Equity instruments

The Group subsequently measures all equity instruments at fair value. Where the Group’s management

has elected to present fair value gains and losses on equity instruments in OCI, there is no subsequent

reclassification of fair value gains and losses to profit or loss following the de-recognition of the

investment. Dividends from such investments continue to be recognised in profit or loss as other income

when the Group’s right to receive payments is established.

Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the

statement of profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity

instruments measured at FVOCI are not reported separately from other changes in fair value.

The Group has elected to measure these equity instruments at FVOCI due to the Group’s intention to

hold these equity instruments for long-term appreciation.





d. Impairment

The Group assesses on a forward-looking basis the expected credit losses (ECL) associated with its debt

instruments not held at FVTPL. ECL are based on the difference between the contractual cash flows due

in accordance with the contract and all the cash flows that the Group expects to receive, discounted at

an approximation of the original effective interest rate. The expected cash flows will include cash flows

from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

The impairment methodology applied depends on whether there has been a significant increase in credit

risk. ECL are recognised in two stages. For credit exposures for which there has not been a significant

increase in credit risk since initial recognition, ECL are provided for credit losses that result from default

events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for

which there has been a significant increase in credit risk since initial recognition, a loss allowance is

recognised for credit losses expected over the remaining life of the exposure, irrespective of timing of

the default (a lifetime ECL).

For receivables which are trade in nature, the Group applies a simplified approach in calculating ECL.

Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance

based on lifetime ECL at each reporting date. The Group has established a provision matrix that is based

on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and

the economic environment.

Significant increase in credit risk

In assessing whether the credit risk on a financial instrument has increased significantly since initial

recognition, the Group compares the risk of a default occurring on the financial instrument as at the

reporting date with the risk of a default occurring on the financial instrument as at the date of initial

recognition. In making this assessment, the Group considers both quantitative and qualitative information

that is reasonable and supportable, including historical experience and forward-looking information that

is available without undue cost or effort.

The Group presumes that the credit risk on a financial asset has increased significantly since initial

recognition when contractual payments are more than 30 days past due, unless the Group has

reasonable and supportable information that demonstrates otherwise.

In particular, the following information is taken into account when assessing whether credit risk has

increased significantly since initial recognition:

• existing or forecast adverse changes in business, financial or economic conditions that are

expected to cause a significant decrease in the debtor’s ability to meet its debt obligations;

• an actual or expected significant deterioration in the operating results of the debtor;

• significant increases in credit risk on other financial instruments of the same debtor; and

• an actual or expected significant adverse change in the regulatory, economic, or technological

environment of the debtor that results in a significant decrease in the debtor’s ability to meet its

debt obligations.





d. Impairment (Cont’d)

Credit-impaired financial asset

A financial asset is credit-impaired when one or more events that have a detrimental impact on the

estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is

credit-impaired includes observable data about the following events:

• significant financial difficulty of the issuer or the borrower;

• a breach of contract, such as a default or past due event;

• the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s

financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not

otherwise consider;

• it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation;

or

• the disappearance of an active market for that financial asset because of financial difficulties.

Definition of default

The Group considers the following as constituting an event of default for internal credit risk management

purposes, as historical experience indicates that receivables that meet either of the following criteria

are generally not recoverable:

• when there is a breach of financial covenants by the counterparty; or

• information developed internally or obtained from external sources indicates that the debtor is

unlikely to pay its creditors, including the Group, in full (without taking into account any collaterals

held by the Group).

The Group considers that default has occurred when a financial asset is more than 90 days past due

unless the Group has reasonable and supportable information to demonstrate that a more lagging

default criterion is more appropriate.

Measurement of expected credit losses

The measurement of ECL is a function of the probability of default, loss given default (i.e. the magnitude

of the loss if there is a default) and the exposure at default. The assessment of the probability of default

and loss given default is based on historical data adjusted by forward-looking information. As for the

exposure at default, for financial assets, this is represented by the assets’ gross carrying amount at

the reporting date; for loan commitments and financial guarantee contracts, the exposure includes

the amount drawn down as at the reporting date, together with any additional amounts expected to

be drawn down in the future by the default date determined based on historical trend, the Group’s

understanding of the specific future financing needs of the debtors, and other relevant forward-looking

information.





d. Impairment (Cont’d)

Write-off policy

The Group writes off a financial asset when there is information indicating that the counterparty is in

severe financial difficulty and there is no realistic prospect of recovery, e.g. when the counterparty has

been placed under liquidation or has entered into bankruptcy proceedings. Financial assets written off

may still be subject to enforcement activities under the Group’s recovery procedures, taking into account

legal advice where appropriate. Any recoveries made are recognised in the profit or loss.

e. Determination of fair value

The fair values of quoted financial assets are based on quoted market prices. If the market for a financial

asset is not active, the Group establishes fair value by using valuation techniques. These include

the use of recent arm’s length transactions, reference to other instruments that are substantially the

same, discounted cash flow analysis, and option pricing models refined to reflect the issuer’s specific

circumstances.

(xi) Financing receivables

(a) Consumer financing receivables

Consumer financing receivables are presented net of amounts financed by banks relating to the

cooperation transactions of loan channelling, unearned consumer financing income and allowance for

impairment loss on consumer financing receivables.

Based on the consumer joint financing agreements (without recourse), the Group only presents the

portion of the total instalments receivable financing by the subsidiaries (net approach). The consumer

financing income is presented net of amounts of the banks’ rights on such income relating to the

transactions.

For consumer joint financing, receivable take over and channelling agreements (with recourse), consumer

financing receivables represent all customers’ instalments and the total facilities financed by creditors are

recorded as liability (gross approach). Interest earned from customers is recorded as part of consumer

financing income, while interest charged by the creditors is recorded as part of financing charges.

Unearned income on consumer financing, which is the excess of the aggregate instalment payments to

be received from the consumers over the principal amount financed, plus or deducted with the financing

process administration fees or expenses, is recognised as income over the term of the respective

agreement using effective interest rate method.

The processing fees, which are incurred at the first time the financing agreement is signed and directly

attributable to consumer financing, are recognised as administration income. Early terminations are

treated as cancellation of existing consumer finance contracts and the resulting gain or loss is recognised

in profit and loss for the year.

The Group does not recognise consumer financing income contract on receivables that are overdue

more than three months. The interest income previously recognised during three (3) months but not

yet collected is reversed against interest income. Such income is recognised only when the overdue

receivable is collected.




(xi) Financing receivables (Cont’d)

(b) Net investment in financing leases

Net investment in financing leases represents financing lease receivables plus the guaranteed residual

value at the end of the lease period and net of unearned financing lease income, security deposits and

allowances for impairment losses. The difference between gross lease receivables and the present value

of the lease receivable is recognised as unearned financing lease income.

Unearned financing lease income is recognised as financing lease income based on a constant rate on

the net investment using effective interest rate.

(c) Other financing receivables

Other financing receivables are factoring receivables purchased from other companies, without recourse.

Other factoring receivables are initially measured at the purchase price, net of directly attributable

transaction costs. They are presented net of purchase price, unearned financing income and allowance

for impairment loss on other factoring receivables.

Unearned income on other financing receivables, which is the excess of the aggregate instalment

payments to be received from the consumers over the principal amount financed, plus or deducted

with the financing process administration fees or expenses, is recognised as income over the term of

the respective agreement using effective interest rate method.

(xii) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and in bank, short term deposits and other short-term

investments with maturities of three months or less at the time of placement or purchase that are subject to

insignificant risk of changes in their fair value and are used by the Group in the management of its short term

commitment.

(xiii) Financial liabilities

The Group’s financial liabilities include loans and borrowings, debt securities (including bond), obligations under

finance leases and trade and other payables.

Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the

instrument. All interest-related charges are recognised as an expense in “finance costs” in the profit or loss.

Financial liabilities are de-recognised if the Group’s obligations specified in the contract expire or are discharged

or cancelled.

Borrowings and debt securities

Borrowings and debt securities are recognised initially at fair value of proceeds received less attributable

transaction costs, if any. Borrowings and debt securities are subsequently stated at amortised cost which is the

initial fair value less any principal repayments. Any difference between the proceeds (net of transaction costs)

and the redemption value is taken to the profit or loss over the period of the borrowings and debt securities

using the effective interest method. Interest expense is chargeable on the amortised cost over the period of

the borrowings and debt securities using the effective interest method.




(xiii) Financial liabilities (Cont’d)

Gains and losses are recognised in the profit or loss when the liabilities are amortised as well as through the

amortisation process.

Borrowings and debt securities which are due to be settled within 12 months after the end of reporting period

are included in current liabilities in the statements of financial position even though the original terms were for a

period longer than 12 months and an agreement to refinance, or to reschedule payments, on a long-term basis

is completed after the end of reporting period. Borrowings and debt securities to be settled within the Group’s

normal operating cycle are classified as current. Other borrowings due to be settled more than 12 months

after the end of reporting period are included in non-current liabilities in the statements of financial position.

Convertible bonds

Convertible bonds that can be converted into share capital where the number of shares issued does not

vary with changes in fair value of the bonds are accounted for as compound financial instruments. The gross

proceeds are allocated to the equity and liability components, with the equity component being assigned the

residual amount after deducting the fair value of the liability component from the fair value of the compound

financial instruments.

Subsequent to initial recognition, the liability component of convertible bonds is measured at amortised cost

using the effective interest method. The equity component of convertible bonds is not re-measured. When the

conversion option is exercised, its carrying amount will be transferred to the share capital. When the conversion

option lapses, its carrying amount is transferred to retained profits.

Trade and other payables

Trade and other payables are initially measured at fair value, and subsequently measured at amortised cost,

using the effective interest method. Finance lease liabilities are measured at initial value less the capital element

of lease repayments (see policy on finance leases).

Financial guarantees

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse

the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with

the terms of a debt instrument.

(xiv) Foreclosed assets

Foreclosed assets acquired in conjunction with settlement of consumer financing receivables are stated at the

lower of related consumer financing receivables’ carrying value or net realisable value of foreclosed assets. The

difference between the carrying value and the net realisable value recorded as part of allowance for impairment

losses and loss on foreclosed assets and is recognised in profit or loss.

In case of default, the customer gives the right to the Group to sell the foreclosed assets or take any other

actions to settle the outstanding receivables. Customers are entitled to the positive differences between the

proceeds from sales of foreclosed assets and the outstanding consumer financing receivables. If the differences

are negative, the resulting losses are recognised in profit or loss.




(xv) Golf membership

Golf membership is measured initially at cost. Subsequent to initial recognition, golf membership is stated at

cost less any accumulated impairment losses, if any. The carrying amount of golf membership is reviewed

annually for impairment when an indicator of impairment arises during the reported period indicates that the

carrying value may not be recoverable.

The golf membership is assessed as having indefinite life and there is no foreseeable limit to the period over

which the memberships are expected to generate cash to the Group. The golf membership is tested for

impairment and carried at cost less accumulated impairment loss, if any.

(xvi) Share capital and treasury shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary

shares are deducted against the share capital account.

When any entity within the Group purchases the Company’s ordinary shares (“treasury shares”), the

consideration paid including any directly attributable incremental cost is presented as a component within equity

attributable to the Company’s equity holders, until they are cancelled, sold or reissued.

(xvii) Contract liabilities and contract assets

A contract liability is the obligation to transfer goods or services to a customer for which the Group has received

consideration (or an amount of consideration is due) from customer. If the customer pays consideration before

the Group transfers good or services to the customer, a contract liability is recognised when the payment is

made or the payment is due (whichever is earlier).

Contract liabilities are recognised as revenue when the Group performs under the contract.

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If

the Group performs by transferring goods or services to a customer before the customer pays consideration

or before payment is due, a contract asset is recognised for the earned consideration.

Costs to fulfil a contract are capitalised if the costs relate directly to the contract, generate or enhance

resources used in satisfying the contract and are expected to be recovered. Capitalised contract costs are

subsequently amortised on a systematic basis as the Group recognises the related revenue. An impairment

loss is recognised in the profit or loss to the extent that the carrying amount of the capitalised contract costs

exceeds the remaining amount of consideration that the Group expects to receive in exchange for the services

to which the contract costs relate, less the costs that relate directly to providing the services and that have

not been recognised as expense.




(xviii) Leases (from 1 January 2019)

(i) The Group as lessee

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group

recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements

in which it is the lessee, except for short-term leases (defined as leases with a lease term of twelve

months or less) and leases of low value assets. For these leases, the Group recognises the lease

payments as an operating expense on a straight-line basis over the term of the lease unless another

systematic basis is more representative of the time pattern in which economic benefits from the leased

assets are consumed.

(a) Lease liability

The lease liability is initially measured at the present value of the lease payments that are not paid

at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot

be readily determined, the Group uses the incremental borrowing rate specific to the lessee. The

incremental borrowing rate is defined as the rate of interest that the lessee would have to pay

to borrow over a similar term and with a similar security the funds necessary to obtain an asset

of a similar value to the right-of-use asset in a similar economic environment.

Lease payments included in the measurement of the lease liability comprise:

• fixed lease payments (including in-substance fixed payments), less any lease incentives;

• variable lease payments that depend on an index or rate, initially measured using the

index or rate at the commencement date;

• the amount expected to be payable by the lessee under residual value guarantees;

• exercise price of purchase options, if the lessee is reasonably certain to exercise the

options; and

• payments of penalties for terminating the lease, if the lease term reflects the exercise of

an option to terminate the lease.

Variable lease payments that are not based on an index or a rate are not included as part of the

measurement and initial recognition of the lease liability. The Group shall recognise those lease

payments in profit or loss in the periods that trigger those lease payments.

For all contracts that contain both lease and non-lease components, the Group has elected to not

separate lease and non-lease components and account these as one single lease component.

The lease liabilities are presented as a separate line item in the statement of financial position.

The lease liability is subsequently measured at amortised cost, by increasing the carrying amount

to reflect interest on the lease liability (using the effective interest method) and by reducing the

carrying amount to reflect the lease payments made.




(xviii) Leases (from 1 January 2019) (Cont’d)

(i) The Group as lessee (Cont’d)

(a) Lease liability (Cont’d)

The Group remeasures the lease liability (with a corresponding adjustment to the related

right-of-use asset or to profit or loss if the carrying amount of the right-of-use asset has already

been reduced to nil) whenever:

• the lease term has changed or there is a significant event or change in circumstances

resulting in a change in the assessment of exercise of a purchase option, in which case

the lease liability is remeasured by discounting the revised lease payments using a revised

discount rate;

• the lease payments change due to changes in an index or rate or a change in expected

payment under a guaranteed residual value, in which cases the lease liability is

remeasured by discounting the revised lease payments using the initial discount rate

(unless the lease payments change is due to a change in a floating interest rate, in which

case a revised discount rate is used); or

• a lease contract is modified and the lease modification is not accounted for as a separate

lease, in which case the lease liability is remeasured by discounting the revised lease

payments using a revised discount rate at the effective date of the modification.

(b) Right-of-use assets

The right-of-use asset comprises the initial measurement of the corresponding lease liability, lease

payments made at or before the commencement day, less any lease incentives received and

any initial direct costs. They are subsequently measured at cost less accumulated depreciation

and impairment losses.

Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset,

restore the site on which it is located or restore the underlying asset to the condition required

by the terms and conditions of the lease, a provision is recognised and measured under

SFRS(I) 1-37. To the extent that the costs relate to a right-of-use asset, the costs are included

in the related right-of-use asset, unless those costs are incurred to produce inventories.





(i) The Group as lessee (Cont’d)

(b) Right-of-use assets (Cont’d)

Depreciation on right-of-use assets is calculated using the straight-line method to allocate their

depreciable amounts over the shorter period of lease term and useful life of the underlying asset,

as follows:

Years

Office and building 2-10Transportation equipment and motor vehicles 1-30

If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset

reflects that the Group expects to exercise a purchase option, the related right-of-use asset

is depreciated over the useful life of the underlying asset. The depreciation starts at the

commencement date of the lease.

The right-of-use assets are presented as a separate line item in the statement of financial

position.

The Group applies SFRS(I) 1-36 to determine whether a right-of-use asset is impaired and

accounts for any identified impairment loss.

(ii) The Group as lessor

Generally, the accounting policies applicable to the Group as a lessor in the comparative period were

not different from SFRS(I) 16, except for the classification of the sublease entered into that resulted in

a finance lease classification.

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease

or an operating lease.

To classify each lease, the Group makes an overall assessment of whether the lease transfers

substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the

case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment,

the Group considers certain indicators such as whether the lease is for the major part of the economic

life of the asset.

At inception or on modification of a contract that contains a lease component, the Group allocates the

consideration in the contract to each lease component on the basis of their relative stand-alone prices.

If an arrangement contains lease and non-lease components, then the Group applies SFRS(I) 15 to

allocate the consideration in the contract.

The Group applies the derecognition and impairment requirements in SFRS(I) 9 to the net investment in

the lease. The Group further regularly reviews estimated unguaranteed residual values used in calculating

the gross investment in the lease.

The Group recognises lease payments received from investment property under operating leases as

income on a straight-line basis over the lease term within “revenue” in profit or loss. Rental income from

subleased property is recognised within “other income” in profit or loss.





(ii) The Group as lessor (Cont’d)

Intermediate lessor in sublease

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sublease

separately. It assesses the lease classification of a sublease with reference to the right-of-use asset

arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term

lease to which the Group applies the recognition exemption, then it classifies the sublease as an

operating lease.

When the sublease is assessed as a finance lease, the Group derecognises the right-of-use asset relating

to the head lease that it transfers to the sublessee and recognised the net investment in the sublease

within “finance lease receivables” in the statement of financial position. Any differences between the

right-of-use asset derecognised and the net investment in sublease is recognised in profit or loss. Lease

liability relating to the head lease is retained in the statement of financial position, which represents the

lease payments owed to the head lessor.

Where the Group is the lessee

Finance leases

Where assets are financed by lease agreements that give rights approximating to ownership, the assets are

capitalised as if they had been purchased outright at values equivalent to the lower of the fair values of the

leased assets and the present value of the total minimum lease payments during the periods of the leases.

The corresponding lease commitments are included under liabilities. The excess of lease payments over the

recorded lease obligations are treated as finance charges which are amortised over each lease to give a

constant effective rate of charge on the remaining balance of the obligation.

The leased assets are depreciated on a straight-line basis over their estimated useful lives as detailed in the

accounting policy on “Property, plant and equipment”.

Operating leases

Rentals on operating leases are charged to profit or loss on a straight-line basis over the lease term. Lease

incentives, if any, are recognised as an integral part of the net consideration agreed for the use of the leased

asset. Penalty payments on early termination, if any, are recognised in the profit or loss when incurred.

Contingent rents are mainly determined as a percentage of revenue in excess of a specified amount during the

month. They are charged to the profit or loss when incurred.




(xviii) Leases (before 1 January 2019) (Cont’d)

Where the Group is the lessor

Finance leases

Where assets are leased out under a finance lease, the present value of the lease payments is recognised as a

receivable. The difference between the gross receivable and the present value of the receivable is recognised

as unearned finance income. Lease income is recognised over the lease term using the net investment method,

which reflects a constant periodic rate of return.

Operating leases

Assets leased out under operating leases are included in investment properties and are stated at revalued

amounts and not depreciated. Rental income (net of any incentives given to lessees) is recognised on a

straight-line basis over the lease term.

(xix) Derivative financial instruments and hedging activities

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are

subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent

changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the

nature of the item being hedged. The Group designates certain derivatives as either:

• hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges)

• hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly

probable forecast transactions (cash flow hedges), or

• hedges of a net investment in a foreign operation (net investment hedges).

At inception of the hedge relationship, the Group documents the economic relationship between hedging

instruments and hedged items including whether changes in the cash flows of the hedging instruments are

expected to offset changes in the cash flows of hedged items. The Group documents its risk management

objective and strategy for undertaking its hedge transactions.

The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining

maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the

remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current

asset or liability.




(xix) Derivative financial instruments and hedging activities (Cont’d)

Cash flow hedges that qualify for hedge accounting

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow

hedges is recognised in the cash flow hedge reserve within equity. The gain or loss relating to the ineffective

portion is recognised immediately in profit or loss, within other gains/(losses).

When option contracts are used to hedge forecast transactions, the Group designates only the intrinsic value

of the options as the hedging instrument.

Gains or losses relating to the effective portion of the change in intrinsic value of the options are recognised

in the cash flow hedge reserve within equity. The changes in the time value of the options that relate to the

hedged item (“aligned time value”) are recognised within OCI in the costs of hedging reserve within equity.

When forward contracts are used to hedge forecast transactions, the Group generally designates only the

change in fair value of the forward contract related to the spot component as the hedging instrument. Gains

or losses relating to the effective portion of the change in the spot component of the forward contracts are

recognised in the cash flow hedge reserve within equity. The change in the forward element of the contract

that relates to the hedged item (“aligned forward element”) is recognised within OCI in the costs of hedging

reserve within equity. In some cases, the entity may designate the full change in fair value of the forward

contract (including forward points) as the hedging instrument. In such cases, the gains or losses relating to

the effective portion of the change in fair value of the entire forward contract are recognised in the cash flow

hedge reserve within equity.

Amounts accumulated in equity are reclassified in the periods when the hedged item affects profit or loss, as

follows:

• Where the hedged item subsequently results in the recognition of a non-financial asset (such as inventory),

both the deferred hedging gains and losses and the deferred time value of the option contracts or deferred

forward points, if any, are included within the initial cost of the asset. The deferred amounts are ultimately

recognised in profit or loss as the hedged item affects profit or loss (for example through cost of sales).

• The gain or loss relating to the effective portion of the interest rate swaps hedging variable rate

borrowings is recognised in profit or loss within finance cost at the same time as the interest expense

on the hedged borrowings.

When a hedging instrument expires, or is sold or terminated, or when a hedge no longer meets the criteria for

hedge accounting, any cumulative deferred gain or loss and deferred costs of hedging in equity at that time

remains in equity until the forecast transaction occurs, resulting in the recognition of a non-financial asset such

as inventory. When the forecast transaction is no longer expected to occur, the cumulative gain or loss and

deferred costs of hedging that were reported in equity are immediately reclassified to profit or loss.




(xix) Derivative financial instruments and hedging activities (Cont’d)

Net investment hedges

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss

on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive

income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognised

immediately in profit or loss within other gains/(losses).

Gains and losses accumulated in equity are reclassified to profit or loss when the foreign operation is partially

disposed of or sold.

Derivatives that do not qualify for hedge accounting

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative

instrument that does not qualify for hedge accounting are recognised immediately in profit or loss and are

included in other gains/(losses).

(xx) Income tax

Current income tax for current and prior periods is recognised at the amount expected to be paid to or

recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively

enacted by the end of reporting period.

Based on Government Regulation of the Republic of Indonesia (RI) No. 71/2008 dated 4 November 2008,

companies whose main activity is sales of land and buildings, is subject to final tax for each payment on sales

of land and factory (including condominiums and cottages) starting January 1, 2009.

Based on Government Regulation of RI No. 5/2002 dated March 23, 2002, each rental payment on the rental

of buildings is subject to final tax of 10% from the gross rental amount starting May 1, 2002.

Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and

liabilities and their carrying amounts in the financial statements except when the deferred income tax arises

from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination

and affects neither accounting or taxable profit or loss at the time of the transaction.

A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries,

associates and joint ventures, except where the Group is able to control the timing of the reversal of the

temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be

available against which the deductible temporary differences and tax losses can be utilised.




(xx) Income tax (Cont’d)

Deferred income tax is measured:

(i) realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been

enacted or substantively enacted by the end of reporting period; and

(ii) based on the tax consequence that will follow from the manner in which the Group expects, at the end

of reporting period, to recover or settle the carrying amounts of its assets and liabilities.

Current and deferred income taxes are recognised as income or expense in the profit or loss, except to the

extent that the tax arises from a business combination or a transaction which is recognised either in other

comprehensive income or directly in equity. Deferred tax arising from a business combination is adjusted

against goodwill on acquisition.

(xxi) Employee benefits

Pension obligations

The Group participates in national pension schemes as defined by the laws of the countries in which it operates.

As required by Indonesian Law, the Group makes contributions to the defined contributions state pension

scheme, Jamsostek contributions, which are recognised as compensation expense in the same period as the

employment that gives rise to the contributions. The ASTEK fund from Jamsostek contributions is responsible

for the entire insurance claim relating to accidents incurred by the employees at the work place and for the

entire retirement benefit obligations of the related employees under the said state pension scheme.

The Group also makes contributions to a defined contribution pension plan which is administered by legal

entity, “Dana Pensiun Lembaga Keuangan Indolife Pensiontama” and “Dana Pensiun Indomobil Group” for

certain employees. The contributions are recognised as an expense in the same period as the employment

that gives rise to the contributions.

The Company and its subsidiaries operating in Singapore contribute to the Central Provident Fund, a defined

contribution plan regulated and managed by the Government of Singapore, which applies to the majority of the

employees. The contributions to the national pension scheme are charged to the profit or loss in the period to

which the contributions relate.

Employee leave entitlements

Employee entitlements to annual leave are recognised when they accrue to employees. Accrual is made for

the estimated liability for unconsumed leave as a result of services rendered by employees up to the reporting

period.




(xxi) Employee benefits (Cont’d)

Provisions for employee service entitlements

The Group has recognised unfunded employee benefits liability in accordance with Indonesian Labor Law

No. 13/2003 dated 25 March 2003 (“the Law”).

The calculation is performed annually by qualified actuarists using the projected unit credit method. When the

calculation results in a benefit to the Group, the recognised asset is limited to the present value of economic

benefits available in the form of any future refunds from the plan or reductions in future contributions to the

plan. In order to calculate the present value of economic benefits, consideration is given to any minimum

funding requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is

realisable during the life of the plan, or on settlement of the plan liabilities.

Remeasurements of the net defined benefit liability comprise actuarial gains and losses, the return on plan

assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest). The Group recognises

them immediately in other comprehensive income and all expenses related to defined benefit plans in employee

benefits expense in profit or loss.

When the benefits of a plan are changed, or when a plan is curtailed, the portion of the changed benefit related

to past service by employees, or the gain or loss on curtailment, is recognised immediately in profit or loss

when the plan amendment or curtailment occurs.

The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

The gain or loss on settlement is the difference between the present value of the defined benefit obligation being

settled as determined on the date of settlement and the settlement price, including any plan assets transferred

and any payments made directly by the Group in connection with the settlement.

(xxii) Impairment of non-financial assets

The carrying amounts of the Company’s and Group’s non-financial assets subject to impairment are reviewed

at the end of each reporting period to determine whether there is any indication of impairment. If any such

indication exists, the asset’s recoverable amount is estimated.

If it is not possible to estimate the recoverable amount of the individual asset, then the recoverable amount of

the cash-generating unit to which the assets belong will be identified.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately

identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment

and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are

expected to benefit from synergies of the related business combination and represent the lowest level within

the Company at which management controls the related cash flows.

Individual assets or cash-generating units that include goodwill or other intangible assets with an indefinite

useful life or those not yet available for use are tested for impairment at least annually. All individual assets or

cash-generating units are tested for impairment whenever events or changes in circumstances indicate that

the carrying amount may not be recoverable.




(xxii) Impairment of non-financial assets (Cont’d)

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount

exceeds its recoverable amount. The recoverable amount represents the value-in-use based on an internal

discounted cash flow calculation. Impairment losses recognised for cash-generating units, to which goodwill

has been allocated, are credited initially to the carrying amount of goodwill. Any remaining impairment loss is

charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all assets are

subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.

Any impairment loss is charged to the profit or loss unless it reverses a previous revaluation in which case it

is charged to equity.

With the exception of goodwill,

• An impairment loss is reversed if there has been a change in the estimates used to determine the

recoverable amount or when there is an indication that the impairment loss recognised for the asset no

longer exists or decreases.

• An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the

carrying amount that would have been determined if no impairment loss had been recognised.

• A reversal of an impairment loss on a revalued asset is credited directly to equity under the heading

revaluation surplus. However, to the extent that an impairment loss on the same revalued assets was

previously recognised as an expense in the profit or loss, a reversal of that impairment loss is recognised

as income in the profit or loss.

An impairment loss in respect of goodwill is not reversed, even if it relates to impairment loss recognised in

an interim period that would have been reduced or avoided had the impairment assessment been made at a

subsequent reporting or end of reporting period.

(xxiii) Related parties

A related party is defined as follows:

(a) A person or a close member of that person’s family is related to the Company and the Group if that

person:

(i) has control or joint control over the Company;

(ii) has significant influence over the Company; or

(iii) is a member of the key management personnel of the Company or the Group or of a parent of

the Company.




(xxiii) Related parties (Cont’d)

(b) An entity is related to the Company and the Group if any of the following conditions applies:

(i) the entity and the Company are members of the same group (which means that each parent,

subsidiary and fellow subsidiary is related to the others).

(ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of

a member of a group of which the other entity is a member).

(iii) both entities are joint ventures of the same third party.

(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) the entity is a post-employment benefit plan for the benefit of employees of either the Company or

an entity related to the Company. If the Company is itself such a plan, the sponsoring employers

are also related to the Company.

(vi) the entity is controlled or jointly controlled by a person identified in (a).

(vii) a person identified in (a) (i) has significant influence over the entity or is a member of the key

management personnel of the entity (or of a parent of the entity).

(viii) the entity, or any member of a group of which it is a part, provides key management personnel

services to the Company or to the parent of the Company.

Key management personnel

Key management personnel are those persons having the authority and responsibility for planning, directing and

controlling the activities of the entity. Directors and certain general managers are considered key management

personnel.

(xxiv) Revenue recognition

Revenue is recognised when the Group satisfies a performance obligation by transferring a promised good

or extending a service to the customer, which is when the customer obtains control of the good or derived

benefits from the usage of the service. A performance obligation may be satisfied at a point in time or over

time. If a performance obligation is satisfied over time, the revenue is recognised based on the percentage of

completion reflecting the progress towards complete satisfaction of that performance obligation. The amount

of revenue recognised is the amount allocated to the satisfied performance obligation.

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for

transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.




(xxiv) Revenue recognition (Cont’d)

(a) Sale of goods

Sale of goods includes automobiles, truck and heavy-duty equipment and automotive parts and

accessories. Revenue is recognised at a point in time when the control of the goods are transferred,

being when the goods are delivered to the customer or collected by customer which signify that all

criteria for acceptance have been satisfied.

(b) Financial services

Revenue from consumer financing, finance leases and factoring receivables is recognised over the term

of the respective contracts based on a constant rate of return on the net investment using the effective

interest method.

(c) Services rendered

Revenue from villa operation, ferry services, golfing, use of social facilities, food and beverages, car

rental, logistic services and clinic operation is recognised when the services are rendered or when the

supplies are delivered to customers.

Revenue from contract service is recognised by reference to the stage of completion of the contract.

Revenue from golf subscription fees is recognised over the period of the subscription while non-refundable

golf club membership is recognised as revenue in the period of sale.

(d) Utilities revenue

Revenue from electricity and water is recognised at a point in time upon consumption by the customer.

(e) Rental and service and maintenance

Rental from investment properties is recognised proportionately over the lease term. The service and

maintenance is provided evenly over the lease term. The aggregate cost of any incentives as a reduction

of rental income is recognised proportionately over the lease term. Rental payments received in advance

are recorded as unearned income and amortised proportionately over the lease term using the straight-

line method. Deposits received from tenants are recorded as part of other current liabilities.

(f) Telecommunication service

Revenue from telecommunication services is recognised over a period of time as it accrues over the term

of the telecommunication contracts. Revenue from telecommunication installation services is recognised

when the installations are placed in service. Revenue from network interconnection with other domestic

telecommunication carriers is recognised when the time connection takes place.




(xxiv) Revenue recognition (Cont’d)

(g) Sales of land and factory

The Group sells land for development and factory in the ordinary course of business. Revenue is

recognised at a point of time when the control over the property had been transferred to the customer,

which coincides with the transfer of the legal title, as the satisfaction of the performance obligation. In

cases where the performance obligation includes specific criteria to be fulfilled in stages, the revenue

is recognised over time based on the stages of completion reflecting the progress towards complete

satisfaction of that performance obligation.

(h) Interest income

Interest income is recognised on a time-apportioned basis using the effective interest rate method.

(i) Dividends

Dividend income is recognised when the shareholders’ right to receive the payment is established.

(j) Government grants

Government grants are recognised at their fair value where there is reasonable assurance that the grant

will be received and attaching conditions will be complied with. When the grant relates to an expense

item, it is recognised in the profit and loss account over the period necessary to match them on a

systematic basis to the costs that it is intended to compensate.

(xxv) Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying

asset are recognised as part of the cost of the related asset. Otherwise, borrowing costs are recognised as

expenses when incurred. Borrowing costs consist of interests and other financing charges that the Group incurs

in connection with the borrowing of funds.

Capitalisation of borrowing costs commences when the activities to prepare the qualifying asset for its intended

use are in progress and the expenditures for the qualifying asset and the borrowing costs have been incurred.

Capitalisation of borrowing costs ceases when substantially all the activities necessary to prepare the qualifying

assets are substantially completed for their intended use.

Foreign exchange differences arising from foreign currency borrowings are capitalised to the extent that they

are regarded as an adjustment to interest costs.

(xxvi) Bond issuance costs

Costs incurred in connection with the issuance of bonds by the Group were deferred and are being amortised

using the effective interest rate method over the term of the bonds.

The balance of deferred bonds issuance costs is presented as a deduction from the outstanding bonds payable.




(xxvii) Functional currencies

Functional and presentation currency

Items included in the financial statements of each entity in the Group are measured using the currency of the

primary economic environment in which the entity operates (“functional currency”). The financial statements

of the Company and the Group are presented in Singapore Dollar, which is also the functional currency of the

Company.

(xxviii) Conversion of foreign currencies

Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the

functional currency using the exchange rates at the date of the transactions. Currency translation differences

resulting from the settlement of such transactions and from the translation of monetary assets and liabilities

denominated in foreign currencies at the closing rates as at the end of reporting period are recognised in the

profit or loss. However, in the consolidated financial statements, currency translation differences arising from

borrowings in foreign currencies and other currency instruments designed and qualifying as net investment

hedged and net investment in foreign operations are recognised in other comprehensive income and

accumulated in the translation reserve.

When a foreign operation is disposed of or any borrowings forming part of the net investment of the foreign

operation are repaid, a proportionate share of the accumulated translation differences is reclassified to profit

or loss, as part of the gain or loss on disposal.

Foreign exchange gains and losses that relate to borrowings are presented in the consolidated statement of

comprehensive income within “finance costs”. Foreign currency gains and losses are reported on a net basis

as either other income or other operating expense depending on whether foreign currency movements are in

a net gain or net loss position.

Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at

the date when the fair values are determined.

Group entities

The results and financial position of all the entities within the Group that have a functional currency different

from the presentation currency are translated into the presentation currency as follows:

(i) Assets and liabilities are translated at the closing rates at the end of the reporting period;

(ii) Income and expenses for each statements presenting profit or loss and other comprehensive income

(i.e. including comparatives shall be translated at exchange rates at the dates of the transactions; and

(iii) All resulting currency translation differences are recognised in other comprehensive income and

accumulated in the translation reserve.




(xxix) Operating segments

For management purposes, operating segments are organised based on their products and services which are

independently managed by the respective segment managers responsible for the performance of the respective

segment under their charge. The segment managers are directly accountable to their chief executive officer who

regularly reviews the segment results in order to allocate resources to the segments and to assess segment

performance.

3 Intangible assets

The Company

Computer

software Total

$’000 $’000

Cost

At 1 January 2018 and 31 December 2018 676 676

At 31 December 2019 676 676

Accumulated amortisation

At 1 January 2018 566 566

Amortisation for the year 48 48

At 31 December 2018 614 614

Amortisation for the year 35 35

At 31 December 2019 649 649

Net book value

At 31 December 2019 27 27

At 31 December 2018 62 62



3 Intangible assets (Cont’d)

The Group Goodwill

Dealerships and

distributorships

Computer

software Total

$’000 $’000 $’000 $’000

Cost

At 1 January 2018 483,458 324,546 1,864 809,868

Additions – – 92 92

Disposal – – (52) (52)

Exchange translation differences – – (4) (4)

At 31 December 2018 483,458 324,546 1,900 809,904

Acquisition of subsidiaries 44,102 – – 44,102

Additions – – 142 142

Disposal – – (47) (47)

Exchange translation differences – – 3 3

At 31 December 2019 527,560 324,546 1,998 854,104

Accumulated amortisation and impairment

At 1 January 2018 – 75,726 1,690 77,416

Amortisation for the year (Note 31) – 16,227 82 16,309

Disposal – – (52) (52)

Exchange translation differences – – (3) (3)

At 31 December 2018 – 91,953 1,717 93,670

Amortisation for the year (Note 31) – 16,227 89 16,316

Disposal – – (47) (47)

Impairment loss (Note 31) 100,100 – – 100,100

Exchange translation differences – – 3 3

At 31 December 2019 100,100 108,180 1,762 210,042

Represented by:

Accumulated amortisation – 108,180 1,762 109,942

Accumulated impairment 100,100 – – 100,100

At 31 December 2019 100,100 108,180 1,762 210,042

Net book value

At 31 December 2019 427,460 216,366 236 644,062

At 31 December 2018 483,458 232,593 183 716,234



3 Intangible assets (Cont’d)

a. Goodwill

Impairment test for goodwill

For the purpose of goodwill impairment testing, the carrying amount of goodwill is allocated to the automotive

business segments.

Summary of the goodwill allocation is as follows:–

2019 2018

The Group $’000 $’000

Attributable to acquisition of PT IMAS group 427,460 483,458

427,460 483,458

Management determined that PT IMAS group represents the Group’s smallest cash-generating units (“CGU”).

PT IMAS group is primarily involved in automotive business.

The recoverable amount of a CGU was determined based on value-in-use calculation. The value-in-use

calculation is a discounted cash flow model using cash flow projections based on financial budgets approved

by management covering a five-year period. Cash flows beyond five-year period were extrapolated using the

estimated growth rates stated below.

Key assumptions used for value-in-use calculations:

2019 2018

Automotive Automotive

Gross margin(1) 19.49% to 22.19% 19.65% to 19.95%

Growth rate(2) 4.85% 5.00%

Discount rate(3) 10.91% 10.12%

(1) Budgeted gross margin(2) Weighted average growth rate used to extrapolate cash flows beyond the budgeted period(3) Pre-tax discount rate applied to the pre-tax cash flows projections

Management determined budgeted gross margin based on past performance and its expectations of the market

development. The weighted average growth rates reflected management’s forecast relating to the automotive

segment. The discount rates used were pre-tax and reflected specific risks relating to the automotive segment.

In 2019, an impairment loss of S$100,100,000 (2018: S$Nil) (Note 31) is charged to “Other operating expenses”

in profit or loss. This impairment charge in 2019 has arisen from the automotive segment as the recoverable

amount of the CGU is 21% lower than its carrying amount due to decline in sales of vehicle in Indonesia as a

result of economic slowdown and declining domestic consumption.

b. Amortisation expense included in the profit or loss is analysed as follows:

2019 2018

The Group $’000 $’000

General and administrative expenses (Note 31) 16,316 16,309

16,316 16,309



4 Property, plant and equipment

The Company

Furniture

fixtures and

equipment

Office

equipment

Leasehold

improvements Total

$’000 $’000 $’000 $’000

Cost

At 1 January 2018 126 242 319 687

Additions – 31 – 31

At 31 December 2018 126 273 319 718

Adoption of SFRS(I) 16

– Reclassification to right-of-use assets

(Note 5) – – (77) (77)

At 1 January 2019, as adjusted 126 273 242 641

Additions – (11) – (11)

Disposals – (11) – (11)

At 31 December 2019 126 273 242 641

Accumulated depreciation

At 1 January 2018 45 147 80 272

Depreciation for the year 22 49 65 136

At 31 December 2018 67 196 145 408

Adoption of SFRS(I) 16

– Reclassification to right-of-use assets

(Note 5) – – (33) (33)

At 1 January 2019, as adjusted 67 196 112 375

Depreciation for the year 22 48 49 119

Disposals – (11) – (11)

At 31 December 2019 89 233 161 483

Net book value

At 31 December 2019 37 40 81 158

At 31 December 2018 59 77 174 310



4 Property, plant and equipment (Cont’d)

Balance at

1.1.2019

Adoption of

SFRS(I) 16

Reclassification

to ROU Assets

(Note 5)

Exchange

translation

difference Additions

Reclassification/

transfers Disposals

Balance at

31.12.2019

The Group $’000 $’000 $’000 $’000 $’000 $’000 $’000

Cost

Leasehold land 201,909 – 2,834 23,342 40,120 – 268,205

Land improvements 5,291 – – – – – 5,291

Landfill 4,242 – – – – – 4,242

Building and

infrastructures 351,469 (146) 3,602 3,046 57,077(i) (236) 414,812

Golf course 25,307 – – – – – 25,307

Utilities plant and

machinery 292,042 – – 1,474 (67) (7,095) 286,354

Machinery and

equipment 114,189 – 1,962 9,255 62,793(ii) (112) 188,087

Vessels and ferry

equipment 58,617 – – 3,286 50 (3,539) 58,414

Working wharf 1,685 – – – – – 1,685

Transportation

equipment and

vehicles 455,667 (3,251) 13,853 11,118 166,829 (9,221) 634,995

Medical equipment 915 – – 3 – – 918

Furniture, fixtures and

equipment 19,462 – 35 1,365 3,168 (227) 23,803

Office equipment 68,805 – 1,777 3,224 1,619 (463) 74,962

Resort equipment 3,068 – 5 56 9 (6) 3,132

Reservoir 10,013 – – – – – 10,013

Telecommunication

equipment 13,544 – 247 835 – (19) 14,607

Leasehold improvements 2,366 – – – – – 2,366

Construction-in-progress 81,973 – 3,396 298,949 (218,636) (897) 164,785

Total 1,710,564 (3,397) 27,711 355,953 112,962 (21,815) 2,181,978

(i) S$57,077,000 was transferred from investment properties (Note 6) to property, plant and equipment.(ii) S$49,968,000 was transferred from investment properties (Note 6) to property, plant and equipment.




Balance at

1.1.2019

Adoption of

SFRS(I) 16

Reclassification

to ROU Assets

(Note 5)

Exchange

translation

difference

Depreciation

for the year

(Note 31)

Reclassification/

transfers Disposals

Balance at

31.12.2019

The Group $’000 $’000 $’000 $’000 $’000 $’000 $’000

Accumulated

depreciation

Leasehold land 101,721 – 1,673 5,252 1 – 108,647

Land improvements 5,026 – – 50 – – 5,076

Landfill 3,544 – – 288 1 – 3,833

Building and

infrastructures 248,481 (61) 1,221 13,763 3,046 (106) 266,344

Golf course 13,566 – – 544 – – 14,110

Utilities plant and

machinery 261,819 – – 5,839 – (4,853) 262,805

Machinery and

equipment 88,792 – 460 8,305 26,874 1,479 125,910

Vessels and ferry

equipment 41,096 – – 3,223 – (3,539) 40,780

Working wharf 1,685 – – – – – 1,685

Transportation

equipment and

vehicles 82,190 (634) 2,139 18,882 (1,595) (4,226) 96,756

Medical equipment 614 – – 10 – – 624

Furniture, fixtures

and equipment 17,419 – 22 1,651 – (189) 18,903

Office equipment 54,610 – 1,415 4,021 1,160 (452) 60,754

Resort equipment 2,510 – 2 188 (1) (6) 2,693

Reservoir 7,712 – – 392 – – 8,104

Telecommunication

equipment 9,459 – 153 746 (2) – 10,356

Leasehold

improvements 1,191 – – 3 – – 1,194

Construction-in-

progress – – – – – – –

Total 941,435 (695) 7,085 63,157 29,484 (11,892) 1,028,574




The Group

Balance at

1.1.2018

Exchange

translation

difference Additions

Reclassification/

transfers Disposals

Balance at

31.12.2018

$’000 $’000 $’000 $’000 $’000 $’000

Cost

Leasehold land 202,575 (4,453) 1,654 2,133 – 201,909

Land improvements 5,291 – – – – 5,291

Landfill 4,242 – – – – 4,242

Building and

infrastructures 343,549 (5,857) 10,273 4,759 (1,255) 351,469

Golf course 25,307 – – – – 25,307

Utilities plant and

machinery 291,606 – 197 239 – 292,042

Machinery and equipment 186,630 (1,739) 8,415 (78,710) (407) 114,189

Vessels and ferry

equipment 57,072 – 1,156 394 (5) 58,617

Working wharf 1,685 – – – – 1,685

Transportation equipment

and vehicles 290,186 (13,107) 9,640 173,439 (4,491) 455,667

Medical equipment 996 – – – (81) 915


equipment 29,595 (107) 838 (1,596) (9,268) 19,462

Office equipment 68,622 (2,842) 3,953 (196) (732) 68,805

Resort equipment 3,167 (17) 87 4 (173) 3,068

Reservoir 10,029 – – (16) – 10,013

Telecommunication

equipment 12,890 (373) 1,024 3 – 13,544

Leasehold improvements 24,965 – – (22,597) (2) 2,366

Construction-in-progress 36,825 (671) 258,282 (212,024) (439) 81,973

Total 1,595,232 (29,166) 295,519 (134,168) (16,853) 1,710,564




The Group

Balance at

1.1.2018

Exchange

translation

difference

Depreciation

for the year

(Note 31)

Reclassification/

transfers Disposals

Balance at

31.12.2018

$’000 $’000 $’000 $’000 $’000 $’000

Accumulated

depreciation

Leasehold land 98,888 (2,664) 5,269 228 – 101,721

Land improvements 4,976 – 50 – – 5,026

Landfill 3,256 – 288 – – 3,544

Building and

infrastructures 248,634 (2,085) 12,016 (9,044) (1,040) 248,481

Golf course 13,022 – 544 – – 13,566

Utilities plant and

machinery 247,485 – 6,390 7,944 – 261,819

Machinery and

equipment 174,259 (1,224) 4,191 (88,058) (376) 88,792

Vessels and ferry

equipment 37,684 – 3,047 370 (5) 41,096

Working wharf 1,685 – – – – 1,685

Transportation

equipment and

vehicles 76,969 (3,360) 29,872 (18,959) (2,332) 82,190

Medical equipment 675 – 20 – (81) 614


equipment 24,207 (37) 1,722 (9) (8,464) 17,419

Office equipment 51,954 (2,203) 5,790 (220) (711) 54,610

Resort equipment 2,494 (4) 192 (5) (167) 2,510

Reservoir 7,321 – 392 (1) – 7,712

Telecommunication

equipment 8,997 (259) 719 2 – 9,459

Leasehold improvements 14,001 – 3 (12,811) (2) 1,191

Construction-in-progress 196 – – (196) – –

Total 1,016,703 (11,836) 70,505 (120,759) (13,178) 941,435




Balance at Balance at

31.12.2019 31.12.2018

The Group $’000 $’000

Net book value

Leasehold land(iii) 159,558 100,188

Land improvements 215 265

Landfill 409 698

Building and infrastructures 148,468 102,988

Golf course 11,197 11,741

Utilities plant and machinery 23,549 30,223

Machinery and equipment 62,177 25,397

Vessels and ferry equipment 17,634 17,521

Working wharf – –

Transportation equipment and vehicles 538,239 373,477

Medical equipment 294 301

Furniture, fixtures and equipment 4,900 2,043

Office equipment 14,208 14,195

Resort equipment 439 558

Reservoir 1,909 2,301

Telecommunication equipment 4,251 4,085

Leasehold improvements 1,172 1,175

Construction-in-progress 164,785 81,973

Total 1,153,404 769,129

Depreciation expense

2019 2018

The Group Note $’000 $’000

Depreciation expense are charged to profit or loss as follows:

(a) Cost of goods sold 38,921 45,460

(b) Other operating expenses 29 15,323 9,570

(c) General and administrative expenses 8,913 15,475

31 63,157 70,505

(i) As at 31 December 2019, certain property, plant and equipment with carrying value totalling approximately

S$619,000,000 (2018 – S$602,000,000) have been pledged as security to banks to secure borrowing and

credit facilities for the Group (Note 19(i) and (iii)).

(ii) In 2018, the total carrying amount of transportation equipment and motor vehicles acquired under finance

leases for the Group amounted to S$2,617,000 (Note 19(iv)). From 1 January 2019, these leased assets are

reclassified to right-of-use assets in the statement of financial position (Note 5).




Depreciation expense (Cont’d)

(iii) Leasehold land

The details of the leasehold land (“Hak Guna Bangunan”/“HGB”) comprise the following:

HGB Expiration date Location

PT Bintan Resort Cakrawala 23 September 2023 (35.85 ha),

13 December 2023 (66 ha),

16 February 2025 (68.72 ha) and

16 February 2025 (1,559 ha)

Bintan Island

PT Batamindo Investment Cakrawala 17 December 2039 (224.12 ha)

26 February 2025 (28.31 ha) and

01 July 2031 (1.50 ha)

Batam Island

PT Batamindo Executive Village 31 August 2020 (193 ha) Batam Island

PT Bintan Inti Industrial Estate

(246.44 ha excluding land sold)

24 August 2075 (236.92 ha) and

13 December 2023 (9.52 ha)

Bintan Island

PT Indomobil Sukses Internasional Tbk.

and its subsidiaries

04 January 2019 to 04 April 2044

(119.08 ha)

Jakarta

Included in construction in progress relates to PT Indomobil Sukses Internasional Tbk and its subsidiaries

amounting to S$164,244,000 (2018 – S$80,280,000), representing all preliminary costs related to the

construction of buildings and improvement and vehicles.

The Group evaluates any indication of impairment in the property, plant and equipment at the end of reporting

period. Carrying values of property, plant and equipment are reviewed for any impairment and possible write-

down of carrying values whenever events or changes in circumstances indicate that their carrying values may

not be fully recoverable. Management is of the opinion that the carrying values of all the property, plant and

equipment of the Group are fully recoverable, and hence no impairment is necessary.



5 Right-or-use assets

Office and building Total

The Company $’000 $’000

CostsAdoption of SFRS(I) 16:– Initial recognition 610 610– Reclassification from property, plant and equipment (Note 4) 77 77

At 1 January 2019, as adjusted 687 687Additions – –

At 31 December 2019 687 687

Accumulated depreciationAdoption of SFRS(I) 16:– Initial recognition – –– Reclassification from property, plant and equipment (Note 4) 33 33

At 1 January 2019, as adjusted 33 33Depreciation for the year 245 245

At 31 December 2019 278 278

Net book valueAt 31 December 2019 409 409

At 1 January 2019 654 654

Office and building

Transportation equipment and motor vehicles Total

The Group $’000 $’000 $’000

CostsAdoption of SFRS(I) 16:– Initial recognition 12,960 818 13,778– Reclassification from property, plant and equipment

(Note 4) 146 3,251 3,397

At 1 January 2019, as adjusted 13,106 4,069 17,175Exchange translation differences 287 – 287Additions 2,446 52,577 55,023

At 31 December 2019 15,839 56,646 72,485

Accumulated depreciationAdoption of SFRS(I) 16:– Initial recognition – – –– Reclassification from property, plant and equipment

(Note 4) 61 634 695

At 1 January 2019, as adjusted 61 634 695Exchange translation differences 25 – 25Depreciation for the year (Note 29 and 31) 5,044 22,485 27,529

At 31 December 2019 5,130 23,119 28,249

Net book valueAt 31 December 2019 10,709 33,527 44,236

At 1 January 2019 13,045 3,435 16,480



5 Right-or-use assets (Cont’d)

Depreciation expense

2019The Group Note $’000

Depreciation expenses are charged to profit or loss as follows:

(a) cost of goods sold 22,340

(b) other operating expenses 29 5,189

31 27,529

Leased properties are located in Singapore and Indonesia.

Information about the Group’s leasing activities are disclosed in Note 35.

6 Investment properties

2019 2018The Group $’000 $’000

CostBalance at beginning of year 694,548 716,479Additions 40,100 4,707Disposals (395) (3,101)Translation differences 13,927 (23,537)Transfer to property, plant and equipment (Note 4) (107,045) –

Balance at end of year 641,135 694,548

Accumulated depreciationBalance at beginning of year 512,345 483,854Depreciation for the year (Note 31) 28,242 28,954Disposals (4) (100)Translation differences (1,223) (363)


Net book value 101,775 182,203

Rental income (Note 31) 29,706 32,744Direct operating expenses arising from investment property that generated

rental income (Note 31) (23,989) (19,476)

Gross profit arising from investment properties 5,717 13,268

Investment properties of the Group are held mainly for use by tenants under operating leases.

The following are the details of the investment properties of the Group:

Gross Area(approximately)

Description and locationFactories, dormitories, commercial complex and housing in Batamindo

Industrial Park, Batamindo Executive Village and Bintan Inti Industrial Estate situated at Batam Island, Bintan Island and Villas 1,079,559 sqm

Office buildings situated in Jakarta 213,549 sqm

As of 31 December 2019, the fair value of the investment properties situated at Batam and Bintan Island of S$514,072,000 (2018 – S$498,936,000) was based on valuation using the income approach/replacement cost approach by independent professional valuers, KJPP Rengganis, Hamid & Rekan after taking into consideration the prevailing market conditions and other factors considered appropriate by the Directors, except for PT Batamindo Executive Village (PT BEV)’s investment properties. The net carrying values of PT BEV’s investment properties as of 31 December 2019 amounted to S$88,000 (2018 – S$113,000) which approximates fair value based on management’s estimates.



6 Investment properties (Cont’d)

As of 31 December 2019, the fair value of the investment properties situated in Jakarta of S$480,685,000 (2018 – S$507,074,000) was based on valuation using the market approach, discounted cash flow and replacement cost approach by independent professional valuers, (i) KJPP Tri, Santi and Rekan, (ii) KJPP Benedictus Darmanpuspita and Rekan, (iii) KJPP Amin, Nirwan, Alfantori and Rekan.

7 Subsidiaries

2019 2018

The Company $’000 $’000

At cost:

– quoted equity securities 1,328,805 1,328,805

– unquoted equity securities

– Balance on beginning of year 1,208,369 1,208,602

– Additions(1) – –

– Disposals(2) (19) (233)

– Impairment loss(3) (76,535) –

– Balance at end of year 1,131,815 1,208,369

2,460,620 2,537,174

Notes:

(1) During the year, the Company has incorporated a wholly-owned subsidiary, GO Greenhouse Investment Pte. Ltd. for issued and paid up capital of S$1.

(2) During the year, the Company and its wholly-owned subsidiary, PT Buana Megawisatama has divested it entire 100% shareholding in PT Bumi Bintan Abadi and its subsidiaries.

(3) During the year, the Company recognised an impairment loss of S$76,535,000 (2018: S$Nil) for its direct shareholding in PT Bintan Inti Industrial Estate as the recoverable amount was lower than the cost of investment.

Management has determined that a subsidiary is considered material to the Group if the Group’s share of its net

tangible assets represents 20% or more of the Group’s consolidated net tangible assets, or if the Group’s share of

its revenue accounts for 10% or more of the Group’s consolidated revenue.

During the year, the Group carried out a review of the recoverable amounts of its investment in subsidiaries in view of

the continuing losses in certain subsidiaries. The recoverable amount was determined based on value-in-use calculation.

The value-in-use calculation is a discounted cash flow model using cash flow projections based on financial budgets

approved by management covering a five-year period. Cash flows beyond five-year period were extrapolated using

the estimated growth rates stated below.

Management determined that PT Bintan Inti Industrial Estate (“PT BIIE”) represents the Group’s smallest cash-

generating units, PT BIIE is involved in the development and management of industrial estate.

Key assumptions used for value-in-use calculations:

2019 2018

Gross margin(1) 6.67% to 54.95% 19.84% to 53.59%

Growth rate(2) 2.98% to 4.85% 4.20% to 5.12%

Discount rate(3) 9.34% to 11.10% 10.12% to 11.56%

(1) Budgeted gross margin

(2) Weighted average growth rate used to extrapolate cash flows beyond the budgeted period

(3) Pre-tax discount rate applied to the pre-tax cash flows projections



7 Subsidiaries (Cont’d)

Details of the Group’s material subsidiaries at the end of the reporting period are set out below:

Name

Place of

incorporation/

and operation

Proportion of

ownership interest

and voting rights

held by the Group Principal activities

2019 2018

% %

Held by the Company

PT Indomobil Sukses

Internasional Tbk

(“PT IMAS”)(1)(4)(5)(6)

Indonesia 71.49 71.49 Investment holding

PT Batamindo Investment

Cakrawala (“PT BIC”)(2)

Indonesia 99.99 99.99 Development and

management of

industrial estate

Held by Verizon Resorts Limited

PT Buana Megawisatama

(“PT BMW”)(3)

Indonesia 99.99 99.99 Wholesaler of hotels,

resorts and golf courses,

resort development

activities and business

management consultancy

Notes:

(1) Audited by Purwantono, Sungkoro & Surja, a member firm of Ernst & Young Global Limited

(2) Audited by Kosasih, Nurdiyaman Mulyadi, Tjahjo & Rekan, a member firm of Crowe International

(3) Audited by Johan Malonda Mustika & Rekan

(4) On 16 August 2018, the effective ownership in PT Indomobil Prima Energi increased from 1% to 90.09% due to an increase in the shareholdings by PT IMG Sejahtera Langgeng, a wholly owned subsidiary of PT IMAS.

(5) On 25 June 2019, the effective ownership in PT Prima Sarana Gemilang increased from 1.50% to 98.99% due to an increase in the shareholdings by PT Wahana Inti Selaras, a wholly owned subsidiary of PT IMAS.

(6) On 30 April 2019, PT Central Sole Agency control 99.01% of PT Jasa Kencana Utama through converting the convertible bond.




At the end of the reporting period, the Company has other subsidiaries that are not material to the Group. The principal

activities of these subsidiaries are summarised as follows:

Principal activities

Place of

incorporation/

and operation Number of subsidiaries

2019 2018

Automotive and related support business Indonesia 1 –

Car rental Indonesia 5 5

Data Processing Indonesia 1 1

Development, operation and management of

industrial park/resorts/residential/country club Indonesia 18 22

Distributor/dealership Indonesia 49 48

Dormant Singapore 1 1

E-Learning/Education services Indonesia 1 1

E-Learning/Education services Singapore 1 1

Financing Indonesia 1 1

Forestry Indonesia 5 –

Growing of food crops Singapore 1 –

Investment holding British Virgin Islands 3 3

Investment holding Indonesia 1 1

Investment holding Malaysia 1 1

Investment holding Seychelles 1 1

Investment holding Singapore 2 2

Logistics Indonesia 2 2

Management and consultancy services Singapore 2 2

Manpower Service Indonesia 1 1

Manufacturing/assembling Indonesia 3 3

Mining Contractor Indonesia 1 –

Plantation/Forestry contractor Indonesia 2 2

Press and dies manufacturing Indonesia 2 2

Provision of ferry services Singapore 1 1

Rental and Building Management Indonesia 1 1

Truck services Indonesia 1 1

Telecommunication services Indonesia 1 1

Trading Indonesia 9 8

Workshop/gas station Indonesia 5 5

123 117

Shares held in PT IMAS and PT BMW have been pledged as securities for bank borrowings (Note 19(iii)).




Summarised financial information in respect of each of the Group’s subsidiaries that has material non-controlling interest

is set out below. The summarised financial information below represents amounts before intragroup eliminations.

a. Summarised Consolidated Statements of Financial Position

PT Indomobil Sukses

Internasional Tbk and

its subsidiaries

As at 31 December

2019 2018

$’000 $’000

Current assets 1,598,968 1,623,874

Non-current assets 2,733,058 2,238,818

Current liabilities (2,074,095) (2,012,063)

Non-current liabilities (1,355,516) (876,964)

Equity attributable to owners of the Company (765,378) (833,282)

Non-controlling interests (137,037) (140,383)

b. Summarised Consolidated Statement of Comprehensive Income

PT Indomobil Sukses

Internasional Tbk and

its subsidiaries

For year ended 31 December

2019 2018

$’000 $’000

Revenue 1,792,189 1,666,567

Expenses (1,777,897) (1,656,969)

Profit for the year 14,292 9,598

Profit attributable to owners of the Company 18,995 2,455

(Loss)/profit attributable to non-controlling interests (4,703) 7,143

Profit for the year 14,292 9,598

Other comprehensive (loss)/income attributable to owners of

the Company (18,983) 72,916

Other comprehensive (loss)/income attributable to

non-controlling interests (3,116) 902

Other comprehensive (loss)/income for the year (22,099) 73,818

Total comprehensive income attributable to owners of the Company 12 75,371

Total comprehensive (loss)/income attributable to non-controlling interests (7,819) 8,045

Total comprehensive (loss)/income for the year (7,807) 83,416




c. Summarised Consolidated Statement of Cash Flows

PT Indomobil Sukses Internasional Tbk and

its subsidiariesFor year ended 31 December

2019 2018$’000 $’000

Net cash outflow from operating activities (72,934) (211,338)Net cash outflow from investing activities (339,536) (304,494)Net cash inflow from financing activities 446,053 499,897

Net cash inflow/(outflow) 33,583 (15,935)

8 Associates

2019 2018$’000 $’000

The GroupUnquoted equity investments, at costBeginning of the year 320,898 321,517Additions during the year 39,320 10,992Disposals during the year(1) – (11,611)

360,218 320,898Allowance for impairment of investment in associates(2) (33,549) (33,549)

Share of post-acquisition reserves (152,107) (148,481)

Accumulated dividend received (24,622) (22,599)

149,940 116,269

(1) In 2018, disposals relate mainly to PT Nissan Motors Indonesia (“NMI”), which had been diluted from a shareholding of 25% to a shareholding on 19.9% as disclosed in Note 11.

(2) In prior years, goodwill of S$33,549,000 relating to an associate was impaired as the associate had incurred losses over the years.

Set out below are the associates of the Group, which, in the opinion of the directors are material to the Group.

Name

Principal

activities

Country of

business/

incorporation

Proportion of ordinary

shares held by Group*

2019 2018

% %

Indirectly held through PT IMAS’s subsidiaries

31 December 2019

PT Hino Motor Sales Indonesia (“PT HMSI”)(1) Distributor Indonesia 28.60 28.60

PT Hino Finance Indonesia (“PT HFI”)(1) Financing Indonesia 26.03 26.03

* These represent the effective interest percentage held by the Group

(1) Audited by Purwantono, Sungkoro & Surja, a member of Ernst & Young Global Limited



8 Associates (Cont’d)

All of these associates are accounted for using the equity method in these consolidated financial statements.

Summarised financial information in respect of each of the Group’s material associates is set out below. The summarised

financial information below represents amounts shown in the associate’s financial statements.

PT HMSI PT HFI

Other

individually

immaterial

associates Total

$’000 $’000 $’000 $’000

31 December 2019

Current assets 452,877 493,994

Non-current assets 29,513 5,253

Current liabilities (424,721) (405,449)

Non-current liabilities (4,966) –

Net assets 52,703 93,798

Revenue 1,057,802 52,234

(Loss)/profit after tax (8,192) 6,214 (73,572) (75,550)

Other comprehensive loss – (5,382) – (5,382)

Total comprehensive (loss)/income (8,192) 832 (73,572) (80,932)

Dividend received from associate during the year 4,722 – (2,699) 2,023

Proportion of the Group’s ownership interest 15,071 24,415 76,954 116,440

PPA adjustment 33,500 – – 33,500

Carrying amount of interest in associate 48,571 24,415 76,954 149,940

The unrecognised share of losses of associate for the year is S$6,933,000 and the cumulative unrecognised share

of loss of associate is S$56,986,000.



8 Associates (Cont’d)

PT HMSI PT HFI

Other

individually

immaterial

associates Total

$’000 $’000 $’000 $’000

31 December 2018

Current assets 636,574 427,636

Non-current assets 16,303 16,683

Current liabilities (408,294) (372,849)

Non-current liabilities (177,809) –

Net assets 66,774 71,470

Revenue 1,411,922 4,021

Profit after tax 8,779 402 (24,123) (14,942)

Other comprehensive loss – (1,138) (220) (1,358)

Total comprehensive income/(loss) 8,779 (736) (24,343) (16,300)

Dividend received from associate during the year 4,721 – 839 5,560

Proportion of the Group’s ownership interest 19,095 18,603 45,071 82,769

PPA adjustment 33,500 – – 33,500

Carrying amount of interest in associate 52,595 18,603 45,071 116,269

The unrecognised share of losses of associate for the year is S$3,181,000 and the cumulative unrecognised share

of loss of associate is S$50,053,000.



9 Financing receivables

The following consists of consumer financing receivables, investment in finance leases and other financing receivables

from subsidiaries engaged in financial services.

2019 2018

The Group $’000 $’000

Current

Net investment in financing leases 311,659 277,655

Consumer financing receivables – net 273,160 217,879

Other financing receivables – net 2,194 23,871

587,013 519,405

Non-Current

Net investment in financing leases 523,583 422,018



807,801 680,318

1,394,814 1,199,723

As at 31 December 2019, financing receivables amounting to S$674 million (2018 – S$568 million) and S$84 million

(2018 – S$178 million) have been pledged as security for borrowings (Note 19(iii)) and debt securities (Note 20)

respectively.

The effective interest rates (per annum) of consumer financing receivables in Indonesian Rupiah are ranging from

11.69% to 33.59% as of 31 December 2019 (2018 – 12.00% to 29.06%).

The effective interest rates (per annum) of net investment in financing leases in Indonesian Rupiah are ranging from

10.14% to 31.29% and for US Dollar from 6.51% to 9.00% as of 31 December 2019 (2018 – 11.31% to 27.44% in

Indonesian Rupiah and 7.57% to 9.29% in US Dollar).

The effective interest rates (per annum) of net of other financing receivables in Indonesian Rupiah are ranging from

13.65% to 34.03% as of 31 December 2019 (2018 – 10.94% to 19.82%).



9 Financing receivables (Cont’d)

(a) Consumer financing receivables – net

2019 2018

$’000 $’000

The Group

Gross Investments – third parties

Not later than one year 330,183 257,292

Later than one year and not later than five years 335,539 303,161

Total 665,722 560,453

Gross Investments – related parties

Not later than one year – 67

Less: unearned finance income (108,346) (87,485)

Less: allowance for impairment losses (7,991) (5,959)


The ageing of consumer financing receivables past due but not impaired is as follows:

2019 2018

$’000 $’000

The Group

Past due 1 – 30 days 4,005 3,501

Past due 31 – 60 days 1,940 1,650

Past due more than 60 days 1,183 1,515

7,128 6,666

Consumer financing receivables that were neither past due nor impaired amounting to S$650,603,000 (2018

– S$547,828,000) for the Group were related to customers for whom there was no recent history of default.

Consumer financing receivables that were past due but not impaired related to customers that have a good

track record with the Group.

Based on historical default rates, the Group believes that no impairment allowance is necessary in respect of

consumer financing receivables not past due or past due over 60 days. These receivables are mainly arising

from customers that have a good credit record with the Group.




(a) Consumer financing receivables – net (Cont’d)

Movements in the allowance for impairment of consumer financing receivables are as follows:

2019 2018

$’000 $’000

The Group

Beginning of the year 5,959 5,097

Allowance for the year (Note 31) 49,783 40,874

Written off during the year (47,919) (39,778)

Translation differences 168 (234)

Balance at end of the year 7,991 5,959

Management believes that the above allowance for impairment losses on consumer financing receivables is

adequate to cover possible losses that may arise from non-cancellation of financing receivables.

The consumer financing receivables are denominated in the following currencies:

2019 2018

$’000 $’000

The Group

Indonesian Rupiah 549,385 467,076

United States Dollar – –

549,385 467,076

The consumer financing debtors relate primarily to the Group’s motor vehicle and motorcycle financing. Before

accepting new customers, the Group assesses the potential customers’ credit worthiness and sets credit limits

by using its internal systems. The receivables given to the customers for financing of vehicles are secured by

Certificates of Ownership (BPKB) or other documents of ownership which give the Group the right to sell the

repossessed collateral or take any other action to settle the outstanding debt.

The loan period ranges from 12 to 36 months for motorcycles, 12 to 60 months for passenger cars and 12 to

36 months for commercial vehicles and heavy equipment and machinery. Default or delinquency in payment

is considered an indicator that the debtor balances are impaired. An allowance for impairment is made based

on the estimated irrecoverable amount by reference to past default experience. The Group has the right to

repossess the assets whenever its customers default on their instalment obligations. It usually exercises its right

if the loan has been overdue for 30 days or longer for motorcycle and passenger car and 60 days or longer for

commercial vehicle and heavy equipment and machinery. Management has considered the balances against

which collective impairment provision is made as impaired.




(b) Net investment in financing leases

2019 2018

$’000 $’000

The Group




1,023,621 844,582


Not later than one year – 15,322

Less: unearned finance lease income (181,667) (155,393)

Less: allowance for impairment losses (6,712) (4,838)

Investment in financing lease – net 835,242 699,673

All the net investment in financing leases that were neither past due nor impaired were related to customers for

whom there was no recent history of default. The Group believes that no impairment allowance is necessary

in respect of the financing receivables as these are mainly arising from customers that have a good credit

record with the Group.

Movements in the allowance for impairment of net investment in finance leases are as follows:

2019 2018

$’000 $’000

The Group

Beginning of the year, as reported 4,838 3,988

Effects of adoption SFRS(I) 9 – 546

Beginning of the year, as restated 4,838 4,534

Allowance for the year (Note 31) 1,768 609

Written off during the year – (129)


Balance at end of the year 6,712 4,838

The Group believes that the above allowance for impairment losses on financing receivables on net investment in

finance leases is adequate to cover possible losses that may arise from non-cancellation of financing receivables.

The financing receivables on net investment in financing leases are denominated in the following currencies:

2019 2018

$’000 $’000

The Group


United States Dollar 9,530 32,848

835,242 699,673




(c) Other financing receivables – net

2019 2018

$’000 $’000

The Group




13,099 25,704


Not later than one year – 11,333

Less: unearned finance lease income (1,116) (3,967)

Less: allowance for impairment losses (1,796) (96)


Other financing receivables that were neither past due nor impaired amounting to S$11,303,000 (2018 –

S$25,608,000) for the Group were related to customers for whom there was no recent history of default. Other

financing receivables that were past due but not impaired related to customers that have a good track record

with the Group.

There are no other financing receivables past due but not impaired.

Movements in the allowance for impairment of net other financing receivables are as follows:

2019 2018

$’000 $’000

The Group

Beginning of the year 96 –

Allowance for the year (Note 31) 1,693 96

Translation difference 7 –

Balance at end of the year 1,796 96

The Group believes that the above allowance for impairment losses on financing receivables on net other

financing receivables is adequate to cover possible losses that may arise from non-cancellation of other

financing receivables.

The financing receivables on net other financing receivables are denominated in the following currencies:

2019 2018

$’000 $’000

The Group


The related parties are corporate entities who are subject to common control or common significant influence by a

shareholder of the Company.



10 Deferred taxation

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset deferred income tax

assets against deferred income tax liabilities and when the deferred income taxes relate to the same fiscal authority.

The amounts, determined after appropriate offsetting, are shown on the statements of financial position as follows:

2019 2018

$’000 $’000

The Group

Deferred tax assets

To be recovered within one year – –

To be recovered after one year 41,079 34,542

41,079 34,542

Deferred tax liabilities

To be recovered within one year – –

To be recovered after one year 101,790 102,209

101,790 102,209

Balance at

1 January

2019

(Credited)/

charged

to profit

or loss

(Note 32)

Charge

to OCI

for the

year

Foreign

exchange

difference

Balance at

31 December

2019

$’000 $’000 $’000 $’000 $’000

The Group

Deferred tax assets

Fiscal loss net of expired tax loss 26,336 16,411 14,684 1,100 58,531

Estimated liability for employee

service entitlements 6,440 954 343 482 8,219

Allowance for impairment loss

of receivables 1,586 541 612 45 2,784


of investments 6,862 (6,697) 38 171 374

Valuation allowance (2) – – – (2)

Property, plant and equipment (8,151) (13,467) (6,816) (978) (29,412)

Foreclosed and intangible assets 269 (3) – 7 273

Lease transaction (14) (1,058) (2,643) (10) (3,725)

Others 1,216 4,799 (2,018) 40 4,037

34,542 1,480 4,200 857 41,079

There were no movements in deferred tax assets between 1 January 2018 and 31 December 2018.



10 Deferred taxation (Cont’d)

Balance at

1 January

2019

(Credited)/

charged

to profit

or loss

(Note 32)

Charge

to OCI

for the

year

Foreign

exchange

difference

Balance at

31 December

2019

$’000 $’000 $’000 $’000 $’000

The Group


Fiscal loss net of expired tax loss 289 – – – 289


service entitlements 1,072 (49) (202) 9 830

Property, plant and equipment (22,549) (649) – 373 (22,825)


of receivables 132 (26) (116) 1 (9)

Interest income (1) – – – (1)

Associates (16,810) – – – (16,810)

Amortisation of distributorships

and Dealerships (58,189) 4,057 – – (54,132)

Equity investment at fair value OCI (14,349) – (1,511) – (15,860)

Others 8,196 (10,993) – 9,525 (29,761)

(102,209) (7,660) (1,829) 9,908 (101,790)

Balance at1 January

2018

(Credited)/chargedto profitor loss

(Note 32)

Chargeto OCIfor the

year

Foreignexchangedifference

Balance at31 December

2018$’000 $’000 $’000 $’000 $’000

The GroupDeferred tax assetsFiscal loss net of expired tax loss 26,040 1,582 (123) (1,163) 26,336Estimated liability for employee

service entitlements 6,473 634 (377) (290) 6,440Allowance for impairment loss

of receivables 1,228 416 – (58) 1,586Allowance for impairment loss

of investments 7,179 – – (317) 6,862Valuation allowance (2) – – – (2)Property, plant and equipment (10,668) 2,070 (12) 459 (8,151)Foreclosed and intangible assets 1,044 (56) (678) (41) 269Lease transaction (27) 12 – 1 (14)Others 1,746 1,236 (1,693) (73) 1,216

33,013 5,894 (2,883) (1,482) 34,542



10 Deferred taxation (Cont’d)

Balance at

1 January

2018,

as reported

Effect of

adoption

SFRS(I) 9

Balance at

1 January

2018,

as restated

(Credited)/

charged

to profit

or loss

(Note 32)

Charge

to OCI

for the

year

Foreign

exchange

difference

Balance at

31 December

2018

$’000 $’000 $’000 $’000 $’000 $’000 $’000

The Group


Fiscal loss net of expired

tax loss 403 – 403 (96) – (18) 289


service entitlements 1,233 – 1,233 (71) (56) (34) 1,072

Property, plant and equipment (15,734) – (15,734) (7,521) – 706 (22,549)


of receivables 90 – 90 44 – (2) 132

Interest income (1) – (1) – – – (1)

Associates (16,810) – (16,810) – – – (16,810)

Amortisation of distributorships

and Dealerships (62,246) – (62,246) 4,057 – – (58,189)

Equity investment

at fair value OCI – (13,180) (13,180) – (1,169) – (14,349)

Others 3,306 – 3,306 – – 4,890 8,196

(89,759) (13,180) (102,939) (3,587) (1,225) 5,542 (102,209)

Unrecognised taxable temporary differences associated with investments in subsidiaries and associates

Deferred income tax liabilities of S$34,900,000 (2018 – S$44,000,000) have not been recognised for withholding and

other taxes that will be payable on the earnings of overseas subsidiaries and associates, as the timing of remission

is controlled by the holding company.



11 Other non-current assets

The Company The Group

2019 2018 2019 2018

Note $’000 $’000 $’000 $’000

Equity investments at FVOCI

Beginning of the year, as reported – – 251,167 96,537

Effect of adoption SFRS(I) 9 – – – 52,722

Beginning of the year, as restated – – 251,167 149,259

Addition (i) – – 11 29,230

Disposal (ii) – – (144,943) (1,098)

Changes in fair value – – 12,738 77,259

Translation differences – – 13,820 (3,483)

At end of the year – – 132,793 251,167

Derivative assets 26 – – 2,745 23,337

Estimated claims for tax refund – – 36,047 28,859

Restricted cash in banks and

time deposits – – 8,006 316

Other receivables (iii) – – 83,712 40,313

Prepayment – – 449 793

Deposits 155 155 628 603

155 155 264,380 345,388

(i) In 2018, included in additions relate mainly to PT Nissan Motors Indonesia (“NMI”), which had been diluted from a shareholding of 25% to a shareholding on 19.9% as disclosed in Note 8.

(ii) This relates to the Group’s investment in shares of PT Multistrada Arah Sarana Tbk which was 100% divested during the year.

(iii) Other receivables represent non-trade balances and are unsecured, interest-free and repayable on demand.

Other non-current assets are mainly denominated in Indonesia Rupiah.

12 Land inventories

2019 2018

$’000 $’000

The Group

Land for sale, at cost 595,241 594,654

As at 31 December 2019, land inventories of PT Surya Bangun Pertiwi (“PT SBP”) comprise 3,744 ha (2018 – 3,744 ha)

with Building Use Right (“HGB”). Part of the land’s HGB for 3,285 ha (2018 – 3,285 ha) will expire in 30 years while the

HGB of 459 ha (2018 – 459 ha) has been extended and renewed for period of 80 years, effective from August 1995.

As at 31 December 2019, PT BMW’s land inventories comprise 13,925 ha (2018 – 13,925 ha) of land with HGB

certificates. Part of the land’s HGB amounting to 12,153 ha (2018 – 12,153 ha) will expire in 30 years while the HGB

of 1,772 ha (2018 – 1,772 ha) has been extended and renewed for a period of 80 years.

Certain plot of lands under land inventories have been pledged as collateral for bank borrowings (Note 19 (iii)).



13 Other inventories

2019 2018

The Group $’000 $’000

At Cost

Finished/trading goods(1) 158,969 237,343

Work-in-progress 3,461 1,486

Raw and indirect materials 16,211 6,716

Spare parts 81,312 80,375

Inventories-in-transit 2,584 21,175

Fuel and lubrication oil 3,160 3,267

Consumables and supplies 29 28

Others 14,677 13,446

Allowance for inventories obsolescence (5,797) (4,284)

274,606 359,552

(1) The finished/trading goods consist of automobiles, motorcycles and stamping dies.

Movements in the allowance for inventories obsolescence are as follows:

2019 2018

$’000 $’000

The Group

Beginning of the year 4,284 3,757

Reversal of allowance for the year (Note 31) (66) (73)

Written off during the year 4,306 723

Translation differences (2,727) (123)

End of the year 5,797 4,284

The reversal of allowance during the prior year was made when the related inventories were sold above their carrying

amount in previous periods.

Inventories amounting to S$168 million at 31 December 2019 (2018 – S$160 million) have been pledged as collateral

for bank borrowings (Note 19(i) and (iii)) and debt securities (Note 20).



14 Trade and other receivables


2019 2018 2019 2018

Note $’000 $’000 $’000 $’000

Trade receivables

– related parties – – 28,553 40,440

– external parties – – 216,592 228,703

Impairment of trade receivables – – (15,433) (13,040)

Net trade receivables (i) – – 229,712 256,103

Other receivables:

Refundable deposits 38 956 69 985

Amount owing by subsidiaries 74,682 78,277 – –

Amount owing by related parties – 52 217,254 213,517

Others 2,175 70 172,897 65,619

76,895 79,355 390,220 280,121

Impairment of other receivables – – (2,050) (1,973)

Net other receivables (ii) 76,895 79,355 388,170 278,148

At amortised cost (i) + (ii) 76,895 79,355 617,882 534,251

Prepayments 65 2,038 28,646 158,356

Foreclosed assets 25 – – 28,453 11,168

Total 76,960 81,393 674,981 703,775

Trade and other receivables are denominated in the following currencies:


2019 2018 2019 2018

$’000 $’000 $’000 $’000

Singapore Dollar 76,960 81,393 12,936 19,982

Indonesian Rupiah – – 627,161 633,370

United States Dollar – – 34,648 49,866

Euro – – 236 524

Swedish Krona – – – 14

Others – – – 19

76,960 81,393 674,981 703,775

The ageing of trade and other receivables past due but not impaired is as follows:


2019 2018 2019 2018

$’000 $’000 $’000 $’000

Past due 1 – 30 days – – 43,939 45,361

Past due 31 – 90 days – – 20,537 14,723

Past due more than 90 days 45 70 83,414 121,593

45 70 147,890 181,677



14 Trade and other receivables (Cont’d)

Trade and other receivables that were neither past due nor impaired amounting to S$76,915,000 (2018 – S$81,323,000)

and S$527,091,000 (2018 – S$522,098,000) for the Company and the Group respectively were related to a wide

range of customers for whom there was no recent history of default. Trade and other receivables that were past due

but not impaired related to a number of customers that have a good track record with the Group. Based on historical

default rates, the Group believes that no impairment allowance is necessary in respect of trade and other receivables

not past due or past due over 90 days. These receivables are mainly arising from customers that have a good credit

record with the Group.

The movements in allowance for impairment losses on doubtful receivables in respect of trade and other receivables

were as follows:

Allowance for

impairment losses on

trade receivables

Allowance for

impairment losses on

other receivables

2019 2018 2019 2018

$’000 $’000 $’000 $’000

The Group

At 1 January 13,040 10,746 1,973 1,514

Allowance during the year 22 4,873 – 472

Allowance written off during the year (320) (2,259) – –

Reversal of allowance during the year – – (573) –

Translation differences 2,691 (320) 650 (13)

At 31 December 15,433 13,040 2,050 1,973

The reversal of allowance was due to the doubtful debts recovered from receivables which were previously provided for.

The average credit period for external and related parties on sales of goods and services rendered varies among the

Group’s businesses in which it is not more than 90 days and do not bear any interest. The credit quality of trade and

other receivables is assessed based on credit policies established by the individual Group businesses. Significant

financial difficulties of a trade and other debtor, probability that the trade and other debtor will enter bankruptcy or

delinquency in payment are considered indicators that the trade and other debtor is impaired and an allowance for

impairment is made based on the estimated irrecoverable amount determined by reference to past default experience.

As at 31 December 2019, certain trade and other receivables amounting to approximately S$348 million (2018 – S$325

million) were pledged to banks to secure borrowing and credit facilities of the Group (Note 19 (i) and (iii)) and debt

securities (Note 20).

The non-trade amount owing by subsidiaries represents (i) interest bearing loans at 1.75% per annum + 1 month

SIBOR rate, and (ii) advanced payment of expenses which are non-interest bearing. These balances are unsecured

and repayable on demand.

The non-trade amount owing by related parties represents mainly advanced payment of expenses, is non-interest

bearing, unsecured and repayable on demand.

The related parties are corporate entities who are subject to common control or common significant influence by a

shareholder of the Company.



15 Cash and cash equivalents


2019 2018 2019 2018

$’000 $’000 $’000 $’000

Cash at bank and on hand 1,697 331 101,052 107,012

Time deposits 50 50 129,472 121,867

1,747 381 230,524 228,879

(i) The fixed deposits have an average maturity of 1 day to 365 days (2018 – 1 day to 365 days) from the end of

the financial year with the following effective interest rates:

2019 2018

Singapore Dollar 0.05% – 0.75% 0.05% – 0.75%

United States Dollar 1.50% – 1.75% 1.50% – 1.75%

Indonesian Rupiah 5.00% – 9.00% 5.00% – 9.00%

(ii) The cash and cash equivalents are denominated in the following currencies:


2019 2018 2019 2018

$’000 $’000 $’000 $’000

Singapore Dollar 848 222 12,257 17,645

United States Dollar 887 131 44,575 45,917

Indonesian Rupiah 12 28 170,978 164,745

Others – – 2,714 572

1,747 381 230,524 228,879

16 Share capital

No. of ordinary share Amount

2019 2018 2019 2018

$’000 $’000

The Company and The Group

Issued and fully paid:

At 1 January 5,338,010,225 5,338,010,225 1,948,307 1,948,307

Issuance of new shares 87,288,136 – 10,239 –

At 31 December 5,425,298,361 5,338,010,225 1,958,546 1,948,307

All issued ordinary shares are fully paid. There is no par value for these ordinary shares.

The holders of ordinary shares (excluding treasury shares) are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’ meetings. All shares rank equally with regard to the Company’s residual assets.

In December 2019, the Company has issued 87,288,136 new ordinary shares at S$0.118 per share for a total consideration of S$10,300,000 for cash (less S$61,000 of share issuance expenses) to provide funds for repayment of the Group’s borrowings.

The newly issued shares rank pari passu in all respects with existing issued shares.



17 Treasury shares

No. of ordinary share Amount

2019 2018 2019 2018

$’000 $’000

The Company and The Group

At 1 January 450,000 – (50) –

Purchase of treasury shares – 450,000 – (50)

At 31 December 450,000 450,000 (50) (50)

On 9 March 2018, the Group purchased 450,000 ordinary shares by way of market acquisition at a net consideration

of S$50,000 and these were presented as a component within shareholders’ equity.

18 Reserves


2019 2018 2019 2018

Note $’000 $’000 $’000 $’000

Capital reserve (i) 80,000 80,000 (105,771) (105,771)

Translation reserve (ii) – – (94,675) (108,341)

Hedging reserve (iii) – – (14,612) (2,254)

Fair value reserve (iv) – – 24,124 64,175

Other reserves (v) – – 26,546 15,597

80,000 80,000 (164,388) (136,594)

The Company

The capital reserve comprises equity component of convertible bonds issued for the acquisition of PT IMAS.

The Group

The capital reserve comprises the effects of transactions with non-controlling interests, arising from the acquisition

of additional PT IMAS shares in 2013.

The translation reserve comprises foreign currency differences arising from the translation of the financial statements

of foreign operations whose functional currencies are different from the Group’s presentation currency.

The hedging reserve comprises the effective portion of the cumulative change (net of taxes) in the fair value of cash

flow hedging instruments related to hedged transactions.

Fair value reserve comprises financial assets designated as fair value through other comprehensive income until the

investments are de-recognised or impaired.

Other reserves comprise of the differences arising from the change in equity of subsidiaries, effects of transaction with

non-controlling interests and actuarial losses from employee benefits.



18 Reserves (Cont’d)

Movement of reserves is as follows:

(i) Capital reserve


2019 2018 2019 2018

$’000 $’000 $’000 $’000

Beginning and at end of year 80,000 80,000 (105,771) (105,771)

(ii) Translation reserve

2019 2018

$’000 $’000

The Group

Beginning of year, as reported (108,341) (84,851)

Effects of adoption SFRS(I) 9 – (386)

Less: Non-controlling interests – 110

– (276)

Beginning of year, as restated (108,341) (85,127)

Net currency translation differences of financial statements

of foreign subsidiaries and associated companies 21,211 (36,752)

Less: Non-controlling interests (7,545) 13,538

At end of year (94,675) (108,341)

(iii) Hedging reserve

2019 2018

$’000 $’000

The Group

Beginning of year (2,254) (474)

Loss arising during the year (17,171) (2,620)

Less: Non-controlling interests 4,813 840

At end of year (14,612) (2,254)



18 Reserves (Cont’d)

(iv) Fair value reserve

2019 2018

$’000 $’000

The Group

Beginning of year, as reported 64,175 (18,838)

Effects of adoption SFRS(I) 9 – 39,934

Less: Non-controlling interests – (11,385)

– 28,549

Beginning of year, as restated 64,175 9,711

Equity instruments at FVOCI – Fair value gain 10,623 76,285

Transfer of fair value reserve of equity instruments at FVOCI (47,639) –

Less: Non-controlling interests (3,035) (21,821)

At end of year 24,124 64,175

(v) Other reserves

2019 2018

$’000 $’000

The Group

Beginning of year 15,597 4,945

Actuarial (loss)/gain during the year (1,079) 5,871

Changes in interest in subsidiaries 20,615 14,730

Less: Non-controlling interests (8,587) (9,949)

At end of year 26,546 15,597



19 Borrowings


2019 2018 2019 2018

Note $’000 $’000 $’000 $’000

Current borrowings

Short term loans (i) – – 974,723 957,908

Loan from subsidiaries (ii) 385,047 362,079 – –

Current portion of non-current borrowings

– Bank loans (iii) 19,410 19,504 622,231 433,486

– Finance leases (iv) – – – 446

– Other loans – – 13,679 18,498

404,457 381,583 1,610,633 1,410,338

Non-current borrowings

Bank loans (iii) 290,495 311,489 1,480,791 1,007,305

Other loans – – 9,320 22,893

290,495 311,489 1,490,111 1,030,198

Total borrowings 694,952 693,072 3,100,744 2,440,536

Represented by:

Secured 309,905 330,993 3,100,744 2,440,536

Unsecured 385,047 362,079 – –

694,952 693,072 3,100,744 2,440,536

(i) Some of the short term loans are secured by the PT Indomobil Sukes Internasional Tbk (“PT IMAS”) subsidiaries’

property, plant and equipment (Note 4), trade and other receivables (Note 14) and other inventories (Note 13)

and have certain terms under the loan agreement that require PT IMAS and its subsidiaries to obtain prior

approval from the borrowers with respect to transactions involving amounts that exceed certain thresholds

agreed with the borrowers such as among others, mergers or acquisitions; sale or pledge of assets and

engaging in non-arm’s length transactions and change in majority ownership.

(ii) Loans from subsidiaries are unsecured and repayable on demand. Interest is charged at the interest rate of

1.7% to 6.00% (2018 – 1.70% to 6.00%) per annum.



19 Borrowings (Cont’d)

(iii) The details of the bank loans are as follows:–

The Company and its subsidiaries (exclude PT IMAS and its subsidiaries)

The bank borrowings are secured by the Company’s and its subsidiaries’ assets as follows:–

(1) Mortgage of certain land titles of PT Batamindo Investment Cakrawala (“PT BIC”), PT Bintan Inti Industrial

Estate (“PT BIIE”) and PT Bintan Resort Cakrawala (“PT BRC”) as disclosed in Note 4 & 6. PT Buana

Megawisatama (“PT BMW”) and PT Surya Bangun Pertiwi (“PT SBP”) as disclosed in Note 12;

(2) Charge on bank accounts of PT BIC, PT BIIE, PT BRC, PT SBP, Bintan Resort Ferries Private Limited

(“BRF”) and the Company;

(3) Assignment of insurance proceeds, receivables and movable assets of PT BIC and PT BIIE;

(4) Pledge of shares of PT IMAS and PT BMW.

Certain covenants as below, among others, need to be maintained and have been complied with as at end of

the reporting period–

(1) Ratio of Borrower Net debts to Borrower EBITDA shall not exceed between 4.50 to 7.0

(2) Borrower Debt Service Coverage Ratio will not be less than 1.25

(3) Borrower Minimum Net Worth will not be less than 1.50 billion

PT IMAS and its subsidiaries

The bank borrowings are secured by the subsidiaries’ assets as follows:–

(1) Property, plant and equipment (Note 4)

(2) Consumer financing receivables (Note 9)

(3) Net investment in finance leases (Note 9)

(4) Other non-current asset – equity instruments at FVOCI (Note 11)

(5) Other inventories (Note 13)

(6) Trade and other receivables (Note 14)

Certain covenants as below, among others, need to be maintained and have been complied with as at the

end of the reporting period–

(1) Gearing ratio will not be more than 8.5 and 10

(2) Maintain management control

(3) Maintain shareholding of minimum 51% in a subsidiary




(iv) Obligations under finance leases

2019 2018

$’000 $’000

The Group

Minimum lease payments payable:


Later than one year and not later than five years – –

Later than five years – –

– 446

Less:

Finance charges allocated to future periods – –

Present value of minimum lease payments – 446

Present value of minimum lease payments:


Later than one year and not later than five years – –

Later than five years – –

– 446

The Group leases motor vehicles and transportation equipment from non-related and related parties under

finance leases. The lease agreements do not have renewal clauses but provide the Group with options to

purchase the leased assets at nominal value at the end of the lease term. The finance lease is secured by the

underlying assets (Note 4).

Obligations under finance leases are reclassified to lease liabilities (Note 23) on 1 January 2019 arising from

the adoption of SFRS(I) 16. The impact of adoption is disclosed in Note 43.

The borrowings of the Company and the Group exposed to interest rates are as follows:


2019 2018 2019 2018

$’000 $’000 $’000 $’000

Current portion:

– at floating interest rate 19,410 19,504 1,384,641 1,206,680

– at fixed interest rate 385,047 362,079 225,992 203,658

404,457 381,583 1,610,633 1,410,338

Non-current portion:

– at floating interest rate 290,495 311,489 1,124,889 715,348

– at fixed interest rate – – 365,222 314,850

290,495 311,489 1,490,111 1,030,198

694,952 693,072 3,100,744 2,440,536




The borrowings are denominated in the following currencies:


2019 2018 2019 2018

$’000 $’000 $’000 $’000

Singapore Dollar 288,162 288,981 244,456 265,385

United States Dollar 121,848 130,808 1,316,279 396,119

Indonesian Rupiah 284,942 273,283 1,540,009 1,779,032

694,952 693,072 3,100,744 2,440,536

The borrowing repayment maturity profile is as follows:–


2019 2018 2019 2018

$’000 $’000 $’000 $’000

Repayable:

Not later than one year 404,457 381,583 1,610,633 1,410,338

Later than one year and not later than five years 290,495 311,489 1,490,111 1,030,198

694,952 693,072 3,100,744 2,440,536

The effective interest rates of the total borrowings at the end of reporting period are as follows:


2019 2018 2019 2018

Short term loans – – 3.60% to

10.50%

3.53% to

10.50%

Bank loans 5.40% to

7.10%

6.44% to

7.53%

2.75% to

10.25%

2.63% to

10.71%

Finance leases – – – 13.18%

Loan from subsidiaries 1.70% to

6.00%

1.70% to

6.00%

– –



20 Debt securities

Debt securities comprise of bonds issued by the Group.

2019 2018

$’000 $’000

The Group

Bonds

– Current 67,621 195,926

– Non-current 103,369 163,237

Nominal value 170,990 359,163

Less: Deferred issuance costs (147) (366)

Net 170,843 358,797

Represented by:

Secured 170,843 358,797

Unsecured – –

170,843 358,797

Repayable:



170,843 358,797

(1) The terms of the Group’s debt securities are as follows:

Details of Bonds

Source

Currency Amount ’000

Range of Nominal

Interest Rate

Range of

Maturity date

IMFI Bonds III Phase III IDR 485,000,000 8.20% – 8.45% 18/05/2021 – 18/05/2023

IMFI Bonds III Phase II IDR 397,000,000 7.90% – 8.15% 15/02/2021 – 15/02/2023

IMFI Bonds III Phase I IDR 215,000,000 8.60% – 9.10% 17/07/2020 – 07/07/2022

IMFI Bonds II Phase IV IDR 172,000,000 8.80% – 9.40% 23/03/2020 – 23/03/2022

IMFI Bonds II Phase III IDR 464,000,000 10.65% 16/03/2020

(2) The bonds were collateralised by fiduciary transfer of financing receivables (Note 9), other inventories

(Note 13) and trade receivables (Note 14) of PT IMAS’s subsidiaries amounting to 50% to 60% of the total

principal amount of the bonds.

The debt securities are denominated in the following currencies:

2019 2018

$’000 $’000

Singapore Dollar – –


170,843 358,797



21 Employee benefits liabilities

2019 2018

$’000 $’000

The Group

Balance at beginning of year 36,709 41,999

Net employee benefits expense for the year (Note 31) 6,559 5,776

Actual benefit payments (1,302) (1,234)

Foreign exchange difference 3,188 (15,125)

Company contribution (208) (578)

Income recognised in other comprehensive income (1,079) 5,871


On 20 June 2000, under Indonesian Law, the Minister of Manpower of the Republic of Indonesia issued Decree

No. Kep-150/Men/2000 regarding “The Settlement of Work Dismissal and Determination of Separation, Gratuity and

Compensation Payment by Companies”. Should there be any work dismissal, a company is obliged to settle any

separation, gratuity and compensation payment, based on the duration of work of the respective employees and in

accordance with the conditions stated in the Decree.

The Decree has been enacted into Law No.13 of 2003 regarding Manpower by the President of the Republic of

Indonesia on 25 March 2003.

The Group recognised a provision for employees’ service entitlement in accordance with the above Law. The benefits

are unfunded. The provision is estimated using the “Projected Unit Credit Method” based on the actual calculation

performed by independent actuaries, PT Dayamandiri Dharmakonsilindo, PT Sentra Jasa Aktuaria, PT Bumi Dharma

Akuaria and PT Sienco Aktuarindo Utama which considered the following assumptions:

Discount rate : 8.14% to 9.19% (2018 – 8.14% to 9.19%) per annum

Mortality rate : Tabel Mortalita Indonesia (TMI–III) – 2011 (2018 – Tabel Mortalita Indonesia

(TMI–III) – 2011)

Annual salary increases : 7% to 8% (2018 – 7% to 8%) per annum

Retirement age : 55 to 60 years

Turnover rates : 5% up to age 25 and reducing linearly up to 0% at the age of 45 and thereafter

Disability rate : 10% of mortality rate

The net employee benefits expense comprises the following:

2019 2018

$’000 $’000

The Group

Current service cost 5,346 4,824

Interest expense 1,174 1,090

Immediate recognition of past service cost – vested – (213)

Excess payment 39 75

6,559 5,776

Net present value of employee benefits liabilities 43,867 36,709



22 Other non-current liabilities


2019 2018 2019 2018

Note $’000 $’000 $’000 $’000

Deposits from tenants (i) 88 88 25,276 27,865

Refundable golf membership deposit (ii) – – 3,724 3,776

Derivative liabilities 26 – – 41,424 1,139

Others – – 1,632 –

88 88 72,056 32,780

(i) Deposits from tenants represent deposits equivalent to certain months’ factory and dormitory rentals, hawkers’

centres, and deposits for electricity supply, in accordance with the provisions of their respective lease

agreements. These deposits will be refunded or applied against rentals due at the end of the lease period.

(ii) Refundable deposits received for golf club membership, which consist of Individual Type, Corporate A and B

type, will be due on 1 August 2020.

The other non-current liabilities are denominated in the following currencies:


2019 2018 2019 2018

$’000 $’000 $’000 $’000

Singapore Dollar 88 88 23,515 26,807

Indonesian Rupiah – – 48,541 5,973

88 88 72,056 32,780

23 Lease liabilities


2019 2019

$’000 $’000

Undiscounted lease payments due:

– Year 1 258 13,824

– Year 2 165 4,534

– Year 3 – 859

– Year 4 – 559

– Year 5 – 287

– Year 6 and onwards – 629

423 20,692

Less: Unearned interest cost (27) (1,092)

Lease liabilities 396 19,600

Presented as:

Current liabilities 231 13,405

Non-current liabilities 165 6,195

396 19,600



23 Lease liabilities (Cont’d)

The Group’s lease liabilities are secured by the lessors’ title to the leased assets.

Total cash outflows for all leases in the year amount to S$3,625,000.

Interest expense on lease liabilities of S$1,672,000 (Note 30) is recognised within “finance costs” in consolidated

statement of comprehensive income.

Rental expenses not capitalised in lease liabilities but recognised within “other operating expenses” in consolidated

statement of comprehensive income are set out below:


2019 2019

$’000 $’000

Short-term leases 5 1,358

Leases of low value assets 5 235

As at 31 December 2019, the Group’s short-term lease commitments at the reporting date are not substantially

dissimilar to those giving rise to the Group’s short-term lease expense for the year.

The future minimum lease payables under non-cancellable operating leases contracted for but for at the balance sheet

date but not recognised as liabilities, are as follows:


2019 2019

$’000 $’000

Short term leases:

– Not later than one year – 470

Leases of low value assets:

– Not later than one year 5 257

– Later than one year and not later than five years 5 306

10 1,033

Further information about leases and the financial risk management are disclosed in Note 35 and Note 39 respectively.

Lease liabilities are denominated in the following currencies:


2019 2019

$’000 $’000

Singapore Dollar 396 1,605

Indonesian Rupiah – 17,995

396 19,600



24 Trade and other payables

The Company The Group2019 2018 2019 2018$’000 $’000 $’000 $’000

TradeTrade payables – – 167,995 320,554

Non-tradeAccruals 916 1,329 59,275 58,356Other payable 8,155 483 204,223 93,558Interest payable on bank loan 6,958 2,905 7,018 2,983Amount owing to related parties – 1 57,073 29,809Amount owing to subsidiaries 69,278 40,776 – –

85,307 45,494 495,584 505,260

Trade payables are generally on 30 days (2018 – 30 days) credit terms.

Other payables represent non-trade advances and balances, which are unsecured, interest-free and repayable on

demand.

Amounts owing to subsidiaries and related parties represent advances and are non-trade, unsecured, interest-free

and repayable on demand.

Trade and other payables are denominated in the following currencies:

The Company The Group2019 2018 2019 2018$’000 $’000 $’000 $’000

Singapore Dollar 33,304 17,697 64,708 52,572Indonesian Rupiah 42,042 26,016 406,763 398,327United States Dollar 9,961 1,781 20,653 24,184Euro – – 3,349 2,807Swedish Kronor – – 58 25,980Others – – 53 1,390

85,307 45,494 495,584 505,260

25 Foreclosed assets

Foreclosed assets represent acquired assets in conjunction with settlement of consumer financing receivables. In case

of default, the consumers give the right to the Group to sell the foreclosed assets or take any other actions to settle

the outstanding receivables.

The Group determined that the foreclosed assets will be converted into cash within maximum three months.

2019 2018

Note $’000 $’000

The Group

Foreclosed assets 32,151 15,110

Less: allowance for impairment loss (3,698) (3,942)

14 28,453 11,168



25 Foreclosed assets (Cont’d)

The movement in allowance for impairment losses in value of foreclosed assets is as follows:–

2019 2018

$’000 $’000

The Group

Balance at beginning of the year 3,942 6,101

Reversal of allowance during the year (Note 31) (350) (1,903)


Balance at the end of the year 3,698 3,942

26 Derivative financial instruments

The fair value of the Group’s derivative financial instruments was:–

2019 2018

Assets Liabilities Assets Liabilities

Note $’000 $’000 $’000 $’000

The Group

Non-current

Designated as cash flow hedges

– Interest rate swaps (i) – 95 78 –

– Cross currency swaps (ii) 1,056 41,010 22,466 –

– Cross currency interest rate swap (iii) 1,689 319 793 1,139

2,745 41,424 23,337 1,139

Not designated as hedging instruments

– Cross currency interest rate swap (iii) – – – –

– Interest rate swaps (iv) – – – –

11, 22 2,745 41,424 23,337 1,139

The full fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of

the hedged item is more than 12 months and, as a current asset or liability, if the maturity of the hedged item is less

than 12 months.

The Group and the Company loss on valuation of fair value of swap not designated as hedging instruments were

recorded as part of other income in the consolidated statement of comprehensive income.

Period when the cash flows on cash flow hedges are expected to occur or affect the profit or loss

Interest rate swaps

Interest rate swaps are transacted to hedge against variable quarterly interest payments on borrowings that will mature

on 13 December 2020. Fair value gains and losses on the interest rate swaps recognised in other comprehensive

income are reclassified to profit or loss as part of interest expense over the period of the borrowings.



26 Derivative financial instruments (Cont’d)

Cross currency swaps

Cross currency swaps are transacted to hedge highly probable forecast transactions denominated in foreign currency

expected to occur at various dates within three months from the end of the reporting period. The cross currency

swaps have maturity dates that coincide within the expected occurrence of these transactions. Gains and losses

recognised in other comprehensive income prior to the occurrence of these hedged forecast transactions affect profit

or loss. This is generally within three months from the end of the reporting period. For those cross currency swaps

used to hedge highly probable forecast foreign currency purchases of property, plant and equipment, fair value gains

and losses are included in the cost of the assets and recognised in profit or loss over their estimated useful lives as

part of depreciation expense.

(i) Interest rate swap

The notional amounts of the interest rate swaps at 31 December 2019 were US$20,166,000 (2018 –

US$14,668,000) for derivative assets and derivative liabilities.

(ii) Cross currency swap

The notional amounts of the cross currency swaps at 31 December 2019 were US$1,029,492,000 (2018 –

US$201,374,000) for derivative assets and derivative liabilities.

(iii) Cross currency interest rate swap

The notional amount of the cross currency interest rate swap at 31 December 2019 were US$60,900,000

(2018 – US$42,000,000) and EUR€ Nil (2018 – EUR€ Nil).

(iv) Interest rate swap

The fair value of the Group’s swaps was recorded as a derivative liability amounting to S$Nil (Note 21).



27 Revenue

Disaggregated revenue information

For the financial year ended 31 December 2019

SegmentsIndustrial

park Utilities AutomotiveResort

operations Total$’000 $’000 $’000 $’000 $’000

Type of goods or servicesSales of goods – – 1,419,181 – 1,419,181Rendering of services 4,406 – – 1,338 5,744Electricity and water supply – 101,374 – – 101,374Sale of residential units 4,093 – – – 4,093Golf revenue 3,977 – – – 3,977Ferry services – – – 26,675 26,675Financial services – – 204,075 – 204,075Rental and related income 24,340 – 168,933 1,314 194,587Telecommunication – 3,085 – – 3,085Others 924 – – 1,972 2,896

Total revenue 37,740 104,459 1,792,189 31,299 1,965,687

Timing of revenue recognitionAt a point in time 13,400 101,374 1,419,181 29,933 1,563,888Over time 24,340 3,085 373,008 1,366 401,799

Total revenue 37,740 104,459 1,792,189 31,299 1,965,687


SegmentsIndustrial

park Utilities AutomotiveResort

Operations Total$’000 $’000 $’000 $’000 $’000

Type of goods or servicesSales of goods – – 1,355,518 – 1,355,518Rendering of services 3,756 – – 1,131 4,887Electricity and water supply – 97,807 – – 97,807Sale of residential units 5,186 – – – 5,186Golf revenue 3,970 – – – 3,970

Ferry services – – – 25,421 25,421

Financial services – – 176,268 – 176,268

Rental and related income 22,309 – 134,781 1,118 158,208Telecommunication – 2,435 – – 2,435Others 974 – – 2,039 3,013

Total revenue 36,195 100,242 1,666,567 29,709 1,832,713

Timing of revenue recognitionAt a point in time 13,886 97,807 1,355,518 28,390 1,495,601Over time 22,309 2,435 311,049 1,319 337,112

Total revenue 36,195 100,242 1,666,567 29,709 1,832,713

The Group operates mainly in Indonesia. Accordingly, revenue by geographical market is not presented.



27 Revenue (Cont’d)

Reconciliation of the revenue with the amount as disclosed in the segment information (Note 38)


Segments

Industrial

park Utilities Automotive

Resort

operations Total

$’000 $’000 $’000 $’000 $’000

External 37,740 104,459 1,792,189 31,299 1,965,687

Inter segment – 69 – 198 267

37,740 104,528 1,792,189 31,497 1,965,954

Elimination – (69) – (198) (267)

Total revenue 37,740 104,459 1,792,189 31,299 1,965,687


Segments

Industrial

park Utilities Automotive

Resort

Operations Total

$’000 $’000 $’000 $’000 $’000

External 36,195 100,242 1,666,567 29,709 1,832,713

Inter segment – 128 – 44 172

36,195 100,370 1,666,567 29,753 1,832,885

Elimination – (128) – (44) (172)

Total revenue 36,195 100,242 1,666,567 29,709 1,832,713

Contract liabilities

31 December

2019 2018

$’000 $’000

Non-Current liabilities

Contract liabilities 12,873 11,621

Current liabilities

Contract liabilities 20,153 15,195

Contract liabilities relate primarily to:

• Advance consideration received from customers; and

• Unearned revenue arising from contract with customers.



27 Revenue (Cont’d)

Contract liabilities (Cont’d)

The contract liabilities are recognised as revenue when the Group fulfils its performance obligation under the contract

with the customer. The significant changes in the contract liabilities during the year are as follows:

2019 2018

$’000 $’000

The Group

Revenue recognised that was included in contract liabilities

at the beginning of the year 15,195 13,651

Increases due to cash received, excluding amounts recognised

as revenue during the year (21,405) (24,386)

28 Other income

2019 2018

$’000 $’000

The Group

Exchange loss, net (4,018) (842)

Loss on disposal of property, plant and equipment (2,216) (221)

Interest income 27,859 22,732

Other telecommunication income 835 796

Bank charges (30) (36)

Bad debt recovered 13,741 12,109

Commission income 6,969 2,509

Penalty income 9,958 8,195

Sales incentive and dealer development 4,489 5,347

Scrap income 491 269

Rental income 3,258 3,364

Administration and registration income 1,926 2,067

Subsidy income (for sales or promotion) 1,000 568

Management fee income 170 226

Loss on land sales cancellation (2,439) –

Write off of other payable – 1,851

Loss on disposal of investment – (148)

Write off of associates – (87)

Provision for doubtful debts (992) (825)

Gain on disposal of subsidiaries 255 –

Gain on dilution from a subsidiary to associate – 464

Gain on dilution from associate to unquoted equity investments – 16,181

Others (11,018) 1,881

50,238 76,400



29 Other operating expenses

2019 2018

$’000 $’000

The Group

Communication 1,701 1,500

Depreciation of property, plant and equipment (Note 4) 15,323 9,570

Depreciation of right-of-use assets (Note 5) 5,189 –

Entertainment 567 527

Insurance 1,449 1,444

Management fee 111 9

Marketing and promotion expenses 13,679 14,396

Professional fees 1,861 1,594

Rental 2,414 6,881

Repairs and maintenance 4,661 4,216

Representation costs 1,496 1,183

Staff costs and related expenses 50,252 44,571

Taxes and licences 4,398 3,886

Transport and travelling 7,855 6,640

Printing and stationeries 151 135

Packing and delivery 9,482 5,522

Security expenses 4,883 4,800

Sales commission and incentive 8,957 8,085

Loss on sales of foreclosed assets 12,366 15,754

Utilities 3,492 3,402

Impairment loss on goodwill (Note 3) 100,100 –

Office supplies 2,302 2,391

Others 4,645 10,729

257,334 147,235

30 Finance costs

2019 2018

$’000 $’000

The Group

Interest expense on:

– Bank loans and short term loans 184,314 136,111

– Other loans 254 579

– Lease liabilities (Note 23) 1,672 –

186,240 136,690



31 Loss before taxation

2019 2018

Note $’000 $’000

The Group

Loss before taxation has been arrived at after charging/(crediting):

Audit fee paid to:

– auditor of the Company 413 418

– other auditors 1,475 1,395

Non-audit fees paid to:

– auditor of the Company 20 24

– other auditors 54 38

Costs of inventories recognised as expenses 1,168,958 1,120,897

Reversal of allowance for inventories obsolescence 13 (66) (73)

Allowance for impairment of financing receivables

– Consumer financing receivables 9(a) 49,783 40,874

– Net investment in financing leases 9(b) 1,768 609

– Other financing receivables 9(c) 1,693 96

53,244 41,579

Reversal of allowance for impairment of foreclosed assets 25 (350) (1,903)

Amortisation of intangible assets 3 16,136 16,309

Depreciation of property, plant and equipment 4 63,157 70,505

Depreciation of right-of-use assets 5 27,529 –

Depreciation of investment properties 6 28,242 28,954

118,928 99,459

Directors’ fees 405 405

Directors’ remuneration

– Directors’ salaries and related costs 3,017 2,695

– CPF contributions 44 44

3,061 2,739

Foreign exchange loss, net 4,018 842

Net (reversal)/allowance for impairment of trade and other receivables,

excluding financing receivables

– Trade receivables 14 22 4,873

– Other receivables 14 (573) 472

(551) 5,345

Operating lease rentals

– office equipment and office premises 455 1,411

Provision for employees’ benefits 21 6,559 5,776

Rental income (included in revenue)

– investment properties 6 (29,706) (32,744)

Operating expenses arising from investment properties that generated

rental income 6 23,989 19,476

Staff costs (other than Directors)

– salaries and related costs 146,639 130,084

– CPF contributions 665 696

147,304 130,780

Impairment loss on goodwill 3 100,100 –

Gain on disposal of subsidiaries 255 –



32 Taxation

2019 2018

Note $’000 $’000

The Group

Current taxation

Indonesia corporate statutory tax rate of 25% 28,458 37,574

Singapore corporate statutory tax rate of 17% 480 350

28,938 37,924

Deferred taxation

Indonesia tax 6,180 (10,650)

Singapore tax – –

10 6,180 (10,650)

35,118 27,274

The tax expense on the results of the financial year varies from the amount of income tax determined by applying the

Singapore statutory rate of income tax on the Group’s loss as a result of the following:

2019 2018

$’000 $’000

The Group

Loss before taxation (219,970) (48,594)

Tax at domestic tax rates applicable to profit in the respective countries 10,957 12,662

Difference of tax effects on gross income subject to final tax instead of corporate

tax (748) (451)

Tax effects on non-taxable income(1) 710 (1,528)

Tax effects on non-deductible expenses(2) 8,925 7,089

Deferred tax on temporary differences not recognised 15,274 9,502

35,118 27,274

(1) Included in other income relates mainly to exchange gain, disposal of subsidiary, and dividend income.

(2) Included in non-deductible expenses relates mainly to interest expense.

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:

2019 2018

$’000 $’000

The Group

Tax losses 4,648 3,704

Tax losses relate mainly to losses generated by Indonesian subsidiaries of the Company.

Under Indonesian taxation laws, tax losses may be carried forward for a period of five (5) years. The tax authorities

may assess the Company within ten (10) years from the date the tax was payable.



33 Other comprehensive income/(loss) after taxation

Before tax Tax expense Net of tax

$’000 $’000 $’000

The Group

31 December 2019

Disclosure of tax effects relating to each component

of other comprehensive income/(loss):

Equity instruments at FVOCI 10,623 – 10,623

Derivative instruments (17,171) – (17,171)

Currency translation differences 21,211 – 21,211

Actuarial losses arising during the period (1,079) – (1,079)

13,584 – 13,584

31 December 2018

Equity instruments at FVOCI 89,465 (13,180) 76,285

Derivative instruments (2,620) – (2,620)

Currency translation differences (36,752) – (36,752)

Actuarial losses arising during the period 5,871 – 5,871

55,964 (13,180) 42,784

34 Loss per share

The Group

The basic loss per share is calculated based on the consolidated losses attributable to owners of the parent divided

by the weighted average number of shares in issue of 5,344,834,236 (2018 – 5,337,635,225) shares during the

financial year.

Fully diluted loss per share was calculated on the consolidated losses attributable to owners of the parent divided by

5,594,834,236 (2018 – 5,587,635,225) ordinary shares. The number of ordinary shares is calculated based on the

weighted average number of shares in issue during the financial year adjusted for the effects of the dilutive issuable

shares from the convertible bond. Dilutive potential ordinary shares are deemed to have been converted into ordinary

shares at the beginning of the year or if later, the date of the issue of the potential ordinary shares.

The following tables reflect the profit or loss and share data used in the computation of basic and diluted loss per

share for the years ended 31 December:

2019 2018

The Group

Basic loss per share (in cents) (4.153) (1.382)

Diluted loss per share (in cents) (4.153) (1.382)

The calculation of loss per share attributable to ordinary equity holders of the Company is based on the following:

2019 2018

$’000 $’000

The Group

Loss attributable to shareholders (221,976) (73,748)



34 Loss per share (Cont’d)

Number of shares used for the calculation of loss per share is as follows:

No.

(in thousands)

No.

(in thousands)

The Group

Weighted average number of ordinary shares for purposes basic loss per share 5,344,834 5,337,635

Effects of dilution:

Assumed conversion of convertible bond 250,000 250,000

Weighted average number of ordinary shares for diluted per shares (’000) 5,594,834 5,587,635

There are 250,000,000 shares granted under the conversion right of the convertible bonds that have not been included

in the calculation of diluted loss per share because they are anti-dilutive.

35 Leases

(i) The Group as lessee

(a) Properties

The Group leases several office premises, warehouse, land, ticketing counter and passenger lounge

(Note 5). Certain of those office premise are sublet to non-related party, as discussed below under the

Group’s leasing activities as intermediate lessor of sublease.

The Group makes monthly lease payments for usage of office premises, warehouse, land, ticketing

counter and passenger lounge under leasing agreements for operation and storage use.

There are no externally imposed covenants on these property lease arrangements.

(b) Transportation equipment and motor vehicles

The Group makes monthly lease payments to acquire transportation equipment and motor vehicles under

hire purchase arrangements to render internal logistics support. These transportation equipment and

motor vehicles are recognised as the Group’s right-of-use assets (Note 5). The hire purchase agreements

for transportation equipment and motor vehicles prohibit the Group from subleasing them to third parties.

Information regarding the Group’s right-of-use assets and lease liabilities are disclosed in Note 5 and

23 respectively.



35 Leases (Cont’d)

(ii) The Group as lessor

Investment property

Operating leases, in which the Group is the lessor, relate to investment property (Note 6) owned by the Group

with lease terms of between 2 to 16 years. The operating lease contract contains market review clauses in

the event that the lessee exercises its option to renew. The lessee does not have an option to purchase the

property at the expiry of the lease period.

These leases are classified as operating lease because the risk and rewards incidental to ownership of the

assets are not substantially transferred. The unguaranteed residual values do not represent a significant risk to

the Group, as they relate to properties which are located in locations with constant increase in value over the

last 5 years. The Group has not identified any indications that this situation will change.

The Group’s revenue from rental income received on the investment properties are disclosed in Note 6.

The future minimum rental receivable under non-cancellable operating leases contracted for the reporting date

are as follows:


2019 2018 2019 2018

$’000 $’000 $’000 $’000

Lease rentals receivable:

Not later than one year 350 346 27,709 25,328

Later than one year and not later

than five years 235 584 54,658 51,809

Later than five years – – 22,342 23,078

585 930 104,709 100,215

The leases on the Company’s premises on which rentals are received will expire on 31 August 2021. The

current rent receivable on the lease ranges from S$9,084 to S$10,015 per month.

The leases on the Group’s premises on which rentals are received will expire between 31 August 2021 and

not later than 31 March 2035. The current rent receivable on the lease ranges from S$1,976 to S$136,767 per

month which are subject to revision on renewal of lease agreement.

(iii) The Group as intermediate lessor of sublease

The Group acts as an intermediate lessor under arrangements whereby it subleases out certain office premise

to non-related party for monthly lease payments. For the sublet of office premises, their sublease periods do

not form a major part of the remaining head lease terms and accordingly, their subleases are classified as

operating lease.

Subleases – classified as operating lease

Included in rental income (Note 28) is S$113,000 (2018: S$112,000) from subleasing of the office premise

during the year which are included within “other income” in consolidated statement of comprehensive income.



36 Commitments

Non-cancellable operating leases

Where the Company and the Group is the lessee

The Company and the Group lease various offices, building, land, warehouses and vehicles under non-cancellable operating leases expiring within 6 months to 10 years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.

In 2018, the future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet date but not recognised as liabilities, were as follows:

The Company The Group2018 2018$’000 $’000

Lease rentals payable:Not later than one year 605 2,304Later than one year and not later than five years 1,024 4,003Later than five years – –

As disclosed in Note 2(b), the Group has adopted SFRS(I) 16 on 1 January 2019. These lease payments have been recognised as right-of-use assets and lease liabilities on the statement of financial position as at 1 January 2019 and have been disclosed in Note 5 and Note 23 respectively, except for short-term and low value leases.

37 Related parties transactions

For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the direct and indirect ability to control the party, jointly control or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

In addition to the related party information disclosed elsewhere in the financial statements, there were significant related party transactions which were carried out in the normal course of business on terms agreed between the parties as follows:

2019 2018The Group $’000 $’000

(a) With associates and joint venturesManagement fees paid 143 161Sales of goods and services (2,448) (8,266)Purchase of goods and services 1,107 970Rental income (340) (282)Broker and guarantee fee 16 51Dividend received (1,692) –

(b) With related companies and associates of ultimateholding companyBroker and guarantee fee 97 –Management fees paid 471 431Human resource management fee 108 332Interest income (2,628) (4,616)Purchase of goods and services 7,156 9,284Rental income – (312)Sales of goods and services (59,201) (60,797)Dividend received (2,214) 7,059

(c) Remuneration of Directors of the Company and keymanagement personnel of the GroupSalaries and other short-term employee benefits 3,061 2,739



38 Segment information

(a) Operating segments

For management purposes, the Group is organised into the following reportable operating segments as follows:–

(i) Industrial parks segment

Industrial parks segment is engaged in activities consisting of the development, construction, operation

and maintenance of industrial properties in Batam Island and Bintan Island together with the supporting

infrastructure activities.

(ii) Utilities segment

Utilities segment is engaged in the activities of provision of electricity and water supply, telecommunication

services and waste management and sewage treatment services to the industrial parks in Batam Island

and Bintan Island as well as resorts in Bintan Island.

(iii) Resort operations segment

The resort operations segment is engaged in the activities of provision of services to resort operators in

Bintan Resort including ferry terminal operations, workers accommodation, security, fire-fighting services

and facilities required by resort operators.

(iv) Property development segment

Property development segment is engaged in the activities of developing industrial and resort properties

in Batam Island and Bintan Island.

(v) Automotive segment

PT IMAS is considered as one operating segment and is organised into automotive segment because

the decisions for resource allocation and performance assessment are made directly by the board of PT

IMAS, taking into account the opinion of the Company’s Board. The automotive segment is engaged

in activities of vehicle sales distribution, after sales services, vehicle ownership financing, spare part

distribution, vehicle assembly, automotive parts manufacturing and other related supporting services.



38

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38 Segment information (Cont’d)

(b) Geographical segments

The Group operates mainly in Indonesia. Accordingly, analysis by geographical segments is not presented.

(c) Segment revenue and segment expense

All segment revenue and expense are directly attributable to the segments.

(d) Segment assets and liabilities

Segment assets include all operating assets and consist principally of trade and other receivables, land

inventories, other inventories, financing receivables, investment properties and property, plant and equipment,

net of allowances and provisions. While most assets can be directly attributed to individual segments, the

carrying amount of certain assets used jointly by two or more segments is allocated on a reasonable basis.

Segment liabilities include all operating liabilities and consist principally of operating payables.

Segment assets and liabilities do not include cash and cash equivalents, notes receivables, deferred tax assets,

deferred tax liabilities, current tax payable, loans and borrowings.

The Group does not have any major customers.

39 Financial risk management objectives and policies

The Company and the Group have financial risk management policies setting out the Company’s and the Group’s

overall business strategies and its risk management philosophy. The Company and the Group are exposed to financial

risks arising from its diversified operations and the use of financial instruments. The financial risks included market

price risk, foreign exchange risk, interest rate risk, credit risk and liquidity risk. The Company’s and the Group’s overall

risk management programme focuses on the unpredictability of financial markets on the Company’s and the Group’s

financial performance. The Company and the Group use financial instruments, principally interest rate swaps and

cross-currency swaps to hedge certain risk exposures.

The Company co-ordinates, under the directions of the directors, financial risk management policies and their

implementation on a group-wide basis. The Group’s policies are designed to manage the financial impact of fluctuations

in interest rates and exchange rates and to minimise the Group’s financial risks. It is the Group’s policy not to enter

into derivative transactions for speculative purposes. The notional amounts and fair values of derivative financial

instruments at 31 December 2019 are disclosed in Note 26.

There has been no change to the Company’s and the Group’s exposure to these financial risks or the manner in which

it manages and measures the risk. Market risk exposures are measured using sensitivity analysis indicated below.



39 Financial risk management objectives and policies (Cont’d)

(a) Market risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity

prices will have on the Group’s income or the value of its holdings of financial instruments. The objective of

market risk management is to manage and control market risk exposures within acceptable parameters, while

optimising the return on risk.

(i) Interest rate risk

Interest rate risk is the risk arising from the changes in market interest rates which leads to the fluctuation

of the fair value or future cash flows of the financial instruments.

The Group is financed through interest-bearing bank loans, other borrowings such as shareholders’

loans, and advances from related parties and debt securities. Therefore, the Group’s exposures to

market risk for changes in interest rates relate primarily to its long-term borrowings obligations and

interest-bearing assets and liabilities. The Group’s policy is to obtain the most favourable interest rates

available without increasing its foreign currency exposure by managing its interest cost using a mixture

of fixed and variable rate debts and long and short-term borrowings. The Group actively reviews its debt

portfolio and evaluates the interest rates are in line with the changes in interest rate which is relevant in

the money market. The Group also uses hedging instruments such as interest rate swaps to minimise its

exposure to interest rate volatility. The Group designates these interest rate swaps and cross currency

interest rate swap as cash flow hedges (Note 26).

Sensitivity analysis for interest rate risk

At the end of reporting period, if Singapore Dollar, United States Dollar and Indonesian Rupiah interest

rates had been 50 (2018 – 50) basis points lower/higher with all other variables held constant, the

Group’s profit/(loss) net of tax would have been higher/lower by the amounts shown below, arising

mainly as a result of lower/higher interest expense on floating rate borrowings.

Profit or loss

2019 2018

$’000 $’000

The Group

Singapore Dollar

– lower 50 basis points (2018 – 50 basis points) 1,222 1,981

– higher 50 basis points (2018 – 50 basis points) (1,222) (1,981)

United States Dollar

– lower 50 basis points (2018 – 50 basis points) 2,229 825

– higher 50 basis points (2018 – 50 basis points) (2,229) (825)

Indonesian Rupiah

– lower 50 basis points (2018 – 50 basis points) 9,096 4,425

– higher 50 basis points (2018 – 50 basis points) (9,096) (4,425)




(a) Market risk (Cont’d)

(ii) Foreign exchange risk

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign

exchange rates. Currency risk arises when transactions are denominated in foreign currencies.

The Group has transactional currency exposures arising primarily from purchases, assets and liabilities

which arise from daily operations that are denominated in a currency other than the respective functional

currencies of group entities, primarily Singapore Dollar (SGD) and Indonesian Rupiah (IDR). The foreign

currencies in which these transactions are denominated are mainly United States Dollar (USD) and

Euro (EURO).

The Company and the Group also hold cash and cash equivalents denominated in foreign currencies

for working capital purposes. At the end of reporting period, such foreign currency balances (mainly in

IDR and USD) amount to S$899,000 (2018 – S$159,000) and S$218,267,000 (2018 – S$211,234,000)

for the Company and the Group respectively.

The Group maintains a natural hedge, whenever possible by borrowing in the currency of the country in

which its property or investment is located or by borrowing in currencies that match the future revenue

streams to be generated from its investments. The Group also enters into cross currency swaps to

hedge the foreign exchange risk of its loans denominated in foreign currency and these swaps are

designated as cash flow hedges (Note 26).

Foreign exchange exposures in transactional currencies other than functional currencies of the operating

entities are kept to an acceptable level.

In relation to its investments in foreign subsidiaries whose net assets are exposed to currency translation

risk and which are held for long term investment purposes, the differences arising from such translation

are recorded under the currency translation reserves. These translation differences are reviewed and

monitored on a regular basis.

Sensitivity analysis

The following table demonstrates the sensitivity to a reasonably possible change in foreign currencies

exchange rate, with all other variables held constant, of the Group’s loss before tax (due to changes in

the fair value of monetary assets and liabilities).




(a) Market risk (Cont’d)

(ii) Foreign exchange risk (Cont’d)

Sensitivity analysis (Cont’d)

2019 2018

Appreciation/(depreciation)

of foreigncurrency rate

Effect onprofit

before taxincrease/

(decrease)

Appreciation/(depreciation)

of foreigncurrency rate

Effect onprofit

before taxincrease/

(decrease)$’000 $’000

Indonesian Rupiah (1.70%) 11,550 9.09% (119,428)Indonesian Rupiah 1.70% (11,550) (9.09%) 119,428

United States Dollar (1.11%) 13,923 2.26% (6,914)United States Dollar 1.11% (13,923) (2.26%) 6,914

Euro 4.11% (128) (2.16%) (11)Euro (4.11%) 128 2.16% 11

Swedish Krona 7.57% (4) 4.17% 1Swedish Krona (7.57%) 4 (4.17%) (1)

The average and year end exchange rates for 2019 and 2018 are as follows:

2019 2018Year end Average Year end Average

Indonesian Rupiah Rp.10,321/$1 Rp.10,348/$1 Rp.10,603/$1 Rp.10,528/$1United States Dollar US$0.73/$1 US$0.73/$1 US$0.73/$1 US$0.74/$1

(iii) Price risk

Price risk is the risk that the value of a financial instrument will fluctuate due to changes in market prices.

The Group is exposed to market price risks arising from its investments quoted on the IDX in Indonesia.

They are held for strategic rather than trading purposes. The Group does not actively trade equity

investments.

(b) Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the

Company or the Group to incur a financial loss. For the subsidiaries engaging in consumer financing, a financial

loss will arise when the debtor does not meet its contractual obligation.

The financial assets that potentially subject the Group to significant concentration of credit risk consist principally

of cash and bank balances, trade and other receivables, financing receivables, loan and notes receivables. For

trade receivables, the Company and the Group adopt the policy of dealing only with customers of appropriate

credit history, and obtaining sufficient security where appropriate to mitigate credit risk. For other financial

assets, the Company and the Group adopt the policy of dealing only with high credit quality counterparties.




(b) Credit risk (Cont’d)

The Company’s and the Group’s objectives are to seek continual growth while minimising losses incurred due

to increased credit risk exposure.

The Group has in place credit policies and procedures to ensure the ongoing credit evaluation and active

account monitoring. Credit risk which is encountered by the Group comes from credits given to customers. To

reduce this risk, there is a policy to ensure the product sales are to be made to customers who can be trusted

and proven to have a good credit history and pass the credit verification. The Group monitors the receivable

balance continuously to maximise installment billings and reduce the possibility of doubtful accounts.

The Group’s exposures to credit risk arise from default of other parties, with maximum exposure equal to

the carrying amount of these instruments. At the reporting date, there were no significant concentrations of

credit risk other than the loan receivable, financing receivables, notes receivables and interest receivables as

disclosed in Note 9 and Note 14.

The Company’s and the Group’s major classes of financial assets are bank deposits, trade and other receivables

and financing receivables. Cash is held with financial institutions of good standing/established financial

institutions/reputable financial institutions. Further details of credit risks on financing receivables and trade and

other receivables are disclosed in Note 9 and Note 14 respectively.

The Company gives corporate guarantees to banks for the bank borrowings of its subsidiaries. The maximum

exposure of the Company in respect of these guarantees at the reporting date is the amount of S$16,000,000

(2018 – S$20,000,000). At the reporting date, the Company has considered it is not probable that a claim will

be made against the Company under such guarantees.

There is no impact on the corporate guarantee as there are no differential rates given by the financial institutions.

Financial assets

The Group applies the SFRS(I) 9 expected credit losses which uses either a 12-month or a lifetime expected

credit losses depending on the level of credit risk to measuring loss allowance for all trade receivables, financing

receivables and other financial assets.

The Group and Company apply the simplified approach to measuring expected credit losses which uses a

lifetime expected loss allowance for all trade receivables. For all other financial assets, the Group and Company

apply the general approach.

While cash and cash equivalents are also subject to the impairment requirements, the identified impairment

loss was immaterial.

For the non-trade intercompany balances, it is considered to have low credit risk, and the loss allowance

recognised during the period was therefore limited to 12 months expected credit losses. Management consider

“low credit risk” when they have a low risk of default and the issuer has a strong capacity to meet its contractual

cash flows obligations in the near term.





Financial assets (Cont’d)

To measure the expected credit losses, trade receivables and financing receivables have been grouped based

on shared credit risk characteristics and days past due.

The expected loss rates are based on the payment profiles of sales over a period of 12 months for trade

receivables and over a period of 96 months for financing receivables before 31 December 2019 or 1 January

2019 respectively and the corresponding historical credit losses experienced within this period. The historical

loss rates are adjusted to reflect current and forward looking information on macroeconomic factors affecting

the ability of the customers to settle the receivables.

The receivables with “non-performing” credit risk rating has been provided for, while the receivables with

“performing” credit risk rating are not impaired.

On that basis, the loss allowance as at 31 December 2019 and 2018 was determined as follows for both trade

receivables and financing receivables:

Trade receivables

Days past due

Current

1-30

days

31-60

days

>60

days Total

$’000 $’000 $’000 $’000 $’000

31 December 2019

Expected credit loss rate – – – 20.86% 6.30%

Gross carrying amount 107,167 43,509 20,483 73,986 245,145

Provision for allowance – – – (15,433) (15,433)

Trade receivables

Days past due

Current

1-30

days

31-60

days

>60

days Total

$’000 $’000 $’000 $’000 $’000

31 December 2018

Expected credit loss rate – – – 14.70% 4.85%

Gross carrying amount 126,617 41,561 12,285 88,680 269,143

Provision for allowance – – – (13,040) (13,040)





Financial assets (Cont’d)

Financing receivables

Days past due

Current

1-30

days

31-60

days

>60

days Total

$’000 $’000 $’000 $’000 $’000

31 December 2019

Expected credit loss rate 1.14% 3.75% 10.69% 16.55% 1.12%

Gross carrying amount 1,404,185 4,005 1,940 1,183 1,411,313

Provision for allowance (15,946) (150) (207) (196) (16,499)

Financing receivables

Days past due

Current

1-30

days

31-60

days

>60

days Total

$’000 $’000 $’000 $’000 $’000

31 December 2018

Expected credit loss rate 0.86% 3.75% 10.69% 16.55% 0.90%

Gross carrying amount 1,203,950 3,501 1,650 1,515 1,210,616

Provision for allowance (10,335) (131) (176) (251) (10,893)

(c) Liquidity risk

Liquidity risk is the risk that the Company and the Group will encounter difficulty in raising funds to meet

commitments associated with financial instruments that are settled by delivering cash or other financial assets.

Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Company’s and the Group’s exposure to liquidity risk arise primarily from mismatches of the maturities

of financial assets and liabilities. The Group maintains a balance between continuity of accounts receivable

collectability and flexibility through the use of borrowings, debt securities and stand-by credit facilities.




(c) Liquidity risk (Cont’d)

The table below analyses the maturity profile of the Company’s and the Group’s financial liabilities based on

contractual undiscounted cash flows:

Contractual undiscounted cash flows

Not laterthan

one year

Later thanone yearand not

later thanfive years

Laterthanfive

years Total

Totalcarryingamount

$’000 $’000 $’000 $’000 $’000

The CompanyAs at 31 December 2019Non-derivative financial liabilities:

Trade and other payables 85,307 – – 85,307 85,307Borrowings 423,091 324,426 – 747,517 694,952Other non-current liabilities – 88 – 88 88Lease liabilities 258 165 – 423 396

508,656 324,679 – 833,335 780,743

As at 31 December 2018Non-derivative financial liabilities:

Trade and other payables 45,494 – – 45,494 45,494Borrowings 394,498 361,909 – 756,407 693,072Other non-current liabilities – 88 – 88 88

439,992 361,997 – 801,989 738,654

Contractual undiscounted cash flows

Not laterthan

one year

Later thanone yearand not

later thanfive years

Laterthanfive

years Total

Totalcarryingamount

$’000 $’000 $’000 $’000 $’000

The GroupAs at 31 December 2019Non-derivative financial liabilities:

Trade and other payables 495,584 – – 495,584 495,584Borrowings 1,746,257 1,790,795 – 3,537,052 3,100,744Debt securities 74,829 110,944 – 185,773 170,843Other non-current liabilities – 29,000 – 29,000 30,632Lease liabilities 13,824 6,239 629 20,692 19,600

2,330,494 1,936,978 629 4,268,101 3,817,403

As at 31 December 2018Non-derivative financial liabilities:

Trade and other payables 505,260 – – 505,260 505,260Borrowings 1,529,835 1,262,464 – 2,792,299 2,440,536Debt securities 143,264 260,452 – 403,716 358,797Other non-current liabilities – 31,641 – 31,641 31,641

2,178,359 1,554,557 – 3,732,916 3,336,234




(c) Liquidity risk (Cont’d)

The table below analyses the derivative financial instruments of the Group for which contractual maturities are

essential for an understanding of the timing of the cash flows into relevant maturity groupings based on the

remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table

are the contractual undiscounted cash flows.

Less than

1 year

Between 1

and 2 years

Between 3

and 5 years

Over

5 years

$’000 $’000 $’000 $’000

The Group

As at 31 December 2019

Net-settled interest rate swaps –

Cash flow hedges

– Net cash inflows 788 – – –

Net-settled currency swaps –

Cash flow hedges

– Net receipts/(payments) 788 268 – –

As at 31 December 2018

Net-settled interest rate swaps –

Cash flow hedges

– Net cash inflows 2,140 – – –

Net-settled currency swaps –

Cash flow hedges

– Net receipts/(payments) 2,140 13,970 3,233 –

The Company and the Group ensure that there are adequate funds to meet all its obligations in a timely and

cost-effective manner.

The Company is able to raise funds through bank borrowings and capital market, and dividend income from

subsidiaries to settle its current liabilities for the next twelve months.

(d) Project development risk

Construction delays can result in loss of revenue. The failure to complete construction of a project according to

its planned specifications or schedule may result in liabilities, reduce project efficiency and lower returns. The

Group manages this risk by closely monitoring the progress of all projects through all stages of construction.



40 Capital management

The Company’s and Group’s objectives when managing capital are:

(a) To safeguard the Company’s and the Group’s abilities to continue as a going concern;

(b) To support the Company’s and the Group’s stabilities and growth;

(c) To provide capital for the purpose of strengthening the Company’s and the Group’s risk management

capabilities; and

(d) To provide an adequate return to shareholders.

The Group actively and regularly reviews and manages its capital structure to ensure optimal capital structure

and shareholders’ returns, taking into consideration the future capital requirements of the Group and capital

efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures

and projected strategic investment opportunities. The Company and the Group currently do not adopt any

formal dividend policy.

The Company and the Group monitor capital net debt ratio, which is net debt divided by total capital plus net

debt. Net debt refers to all external borrowings including lease liabilities, less bank balances and short-term

deposits. Capital represents total equity of the Group. The capital net debt ratio is monitored both inclusive and

exclusive of the Group’s financial services companies, which by their nature are generally more leveraged than

the Group’s other businesses. The Company and the Group do not have a defined gearing ratio benchmark

or range.

The capital net debt ratios at 31 December 2019 and 2018 were as follows:


2019 2018 2019 2018

$’000 $’000 $’000 $’000

Including financial service company

Net Debt 693,601 692,691 3,060,663 2,570,454

Total equity + debt 2,452,932 2,572,729 4,810,327 4,531,718

Excluding financial service company

Net Debt – – 1,197,217 1,133,280

Total equity + debt – – 2,888,165 3,062,537

Capital net debt ratio excluding financial

service companies 0.28 0.27 0.41 0.37

Capital net debt ratio including financial

service companies 0.28 0.27 0.64 0.57

There were no changes in the Company’s and the Group’s approach to capital management during the year.

The capital net debt to equity ratio for the Group increased from 0.63 to 0.64 following the adoption of SFRS(I)

16, Leases. Both net debt and gross assets increased following the recognition of right-of-use assets and

lease liabilities on 1 January 2019.

The Company and its subsidiaries are not subjected to externally imposed capital requirements except as

disclosed in Note 19 and Note 20.



41 Financial instruments

Accounting classification of financial assets and financial liabilities

The fair values of financial assets and financial liabilities are as follows:

2019 2018

Note $’000 $’000

Financial assets

The Company

Financial assets at amortised cost

Trade and other receivables 14 76,895 79,355

Cash and cash equivalents 15 1,747 381

Other non-current assets 11 155 155

78,797 79,891

The Group

Financial assets at amortised cost

Trade and other receivables 14 617,882 534,251

Financing receivables 9 1,394,814 1,199,723

Cash and cash equivalents 15 230,524 228,879

Other non-current assets(1) 11 92,346 41,232

2,335,566 2,004,085

Financial assets at fair value through other

comprehensive income (FVOCI) 11 132,793 251,167

Derivative financial instruments

used for hedging 11, 26 2,745 23,337

2,471,104 2,278,589

(1) Comprises restricted cash/time deposits, deposits and other receivables



41 Financial instruments (Cont’d)

Accounting classification of financial assets and financial liabilities (Cont’d)

2019 2018

Note $’000 $’000

Financial liabilities

The Company

Financial liabilities at amortised cost

Trade and other payables 24 85,307 45,494

Borrowings 19 694,952 693,072

Other non-current liabilities 22 88 88

Lease liabilities 23 396 –

780,743 738,654

The Group

Financial liabilities at amortised cost

Trade and other payables 24 495,584 505,260

Borrowings 19 3,100,744 2,440,536

Debt securities 20 170,843 358,797

Other non-current liabilities(2) 22 29,000 31,641

Lease liabilities 23 19,600 –

3,815,771 3,336,234

Derivative financial instruments

Held for trading at FVPL 26 41,424 1,139

3,857,195 3,337,373

(2) Excludes derivative liabilities



42 Fair value measurement

Definition of fair value

SFRS(I) define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date.

Fair value hierarchy

Financial assets and financial liabilities measured at fair value in the statements of financial position are grouped into

three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to

the measurement as follows:

• Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities

• Level 2 : inputs other than quoted prices included within Level 1 that are observable for the asset or liability,

either directly or indirectly

• Level 3 : unobservable inputs for the asset or liability.

The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair value on a

recurring basis at 31 December 2019 and 31 December 2018.

Level 1 Level 2 Level 3 Total

Note $’000 $’000 $’000 $’000

2019

Financial assets

The Group

Equity investments at FVOCI 11 63,441 – 69,352 132,793

Derivative assets 26 – 2,745 – 2,745

63,441 2,745 69,352 135,538


The Group

Derivative liabilities 26 – 41,424 – 41,424

2018

Financial assets

The Group

Equity investments at FVOCI 11 179,111 – 72,056 251,167

Derivative assets 26 – 23,337 – 23,337

179,111 23,337 72,056 274,504


The Group

Derivative liabilities 26 – 1,139 – 1,139



42 Fair value measurement (Cont’d)

Fair value measurement of financial instruments

(i) Level 1 fair value measurements

The quoted equity instruments or available-for-sale equity investments held by the Group is traded in active

markets and is based on quoted market prices at the end of reporting period. The quoted market price used

for financial assets held by the Group is the current market price.

(ii) Level 2 fair value measurements

The Group’s derivatives consist of interest rate swap contracts and cross currency interest rate swap contracts.

These derivatives are valued using a valuation technique with market observable inputs. The most frequently

applied valuation techniques include forward pricing and swap models, using present value calculations. The

models incorporate various inputs including credit quality of counterparties, foreign exchange spot and forwards

rates, interest rate curves and forward rate curves. The Group held unquoted investments in shares of stock.

(iii) Level 3 fair value measurements

The Group held unquoted investments in shares of stock. The fair values are determined by reference to these

investments’ net assets values as stated in their audited financial statements, adjusted for lack of marketability

and related tax effects.

(iv) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are

reasonable approximation of fair value

The carrying amount of trade and other receivables (Note 14), current financing receivables (Note 9), cash and

cash equivalents (Note 15), trade and other payables (Note 24), current borrowings (Note 19) and current debt

securities (Note 20) are reasonable approximation of fair values due to their short term nature.

The carrying amounts of other non-current assets (Note 11), other non-current liabilities (Note 22) and non-

current borrowings (Note 19) and non-current debt securities (Note 20) are reasonable approximation of fair

values as their interest rate approximate the market lending rate.

(v) Non-financial assets and liabilities not carried at fair value but for which fair value is disclosed

The Group’s investment properties and employee benefit liabilities are not measured at fair values but which

fair values are disclosed. They are classified under Level 3 of the fair value hierarchy. The details on the fair

value of investment properties and employee benefit liabilities are disclosed in note 6 and 21.

The fair value of the investment properties is based on advice from firms of independent professional valuers

using the capitalisation method and/or market comparable. The valuations of the investment properties are

based on the highest and best use. Current use, unless there are any evidence to the contrary, is considered

highest and best use.



43 Adoption of new accounting standards

Adoption of SFRS(I) 16, Leases

SFRS(I) 16 Leases sets out the principles for the recognition, measurement, presentation and disclosure of leases,

eliminates the lessee’s classification of leases as either operating or finance leases and introduce a single lessee

accounting model.

The Group has adopted SFRS(I) 16 using the modified retrospective method of adoption with the date of initial

application of 1 January 2019 without restatement of comparative information on transition. Under this method, the

standard is applied retrospectively with the cumulative effect of initially applying the standard recognised at the date

of initial application.

The Group’s weighted average incremental borrowing rate applied to measure the Group’s lease liabilities recognised

in the consolidated statement of financial position on 1 January 2019 is 6.82%.

A reconciliation of the differences between the Group’s operating lease commitments previously disclosed in the

financial statements as at 31 December 2018 and the Group’s lease liabilities recognised in the statement of financial

position on 1 January 2019 is as follows:

$’000

Operating lease commitments as at 1 January 2019 6,307

Less:

Commitments relating to short-term leases exempted from recognition (19)

Commitments relating to leases of low-value assets exempted from recognition (206)

Combination of non-lease components on the remaining lease terms 141

Lease period not previously included that is under extension option reasonably

certain to be exercised 1,177

Discounting based on the weighted average incremental borrowing rate (1,352)

Obligations under finance lease at 31 December 2018 reclassified to lease liabilities (Note 19(iv)) 446

Lease liabilities as at 1 January 2019 6,494



43 Adoption of new accounting standards (Cont’d)

The effects of adoption of SFRS(I) 16 on the Group’s and the Company’s financial statements as at 1 January 2019

are as follows:

Group

Increase/

(Decrease)

$’000

Assets:

Property, plant and equipment (2,702)

Right-of-use assets (Note 5) 16,480

Prepayments (7,730)

6,048

Liabilities:

Borrowings – obligations under finance leases (446)

Lease liabilities 6,494

6,048

Equity:

Reserves – Retained profits –

Non-controlling interests –

–

Company

Increase/

(Decrease)

$’000

Assets:

Property, plant and equipment (44)

Right-of-use assets (Note 5) 654

610

Liabilities:

Lease liabilities 610

Equity:

Reserves – Retained profits –

Non-controlling interests –

–



44 Events after end of reporting period

(i) The outbreak of COVID-19 (Coronavirus Disease 2019) first reported in China in 31 December 2019 has at

the date of these financial statements, become a pandemic. Several countries sought to contain the spread of

COVID-19 by imposing lockdown, closure of borders, travel ban and restriction on movement of people. The

COVID-19 is causing major impact on both Chinese and the global economy with reduced production and

private consumption. The Group’s operation in Indonesia will be affected by the outbreak particularly on its

resort segment. While the full impact of the COVID-19 on the Group’s performance cannot be reliably quantified,

it is expected that the performance to be negatively impacted subsequent to the balance sheet date.

(ii) The Group has incorporated wholly-owned subsidiaries, GO Cloud Data Center Pte. Ltd. and GO Marine

Offshore Investments Pte. Ltd.

(iii) The Group has entered into a joint development agreement with Obayashi Corporation to pilot a

technologically-advanced eco-tourism focused greenhouse on Bintan Island, Indonesia.

(iv) The Group has acquired 26% of equity interest for a total consideration of S$7.41 million on BOMC Pte. Ltd.

which in the business of providing end-to-end offshore marine and oil and gas related engineering services.

(v) The Group’s subsidiary, PT Indomobil Sukses International Tbk’s effective shareholding in PT Garuda Mataram

Motor has increased from 99.90% to 99.93%.

(vi) The Group’s subsidiary, PT Indo Traktor Utama has increased its paid up share capital from Rp36,000,000,000

to Rp118,000,000,000 and the Group has subscribed and fully paid in accordance to its percentage of

ownership.

(vii) The Group has obtained and extended the credit facilities with several banks including PT Bank BTPN, PT

Bank Danamon Indonesia and PT Bank OCBC NISP.

(viii) The Group has divested its investment 18.9% in PT Nissan Motor Indonesia for a total consideration of

Rp330,000,000,000.



Issued and Fully Paid-up Capital : $1,961,671,758.64

Total number of shares including treasury shares : 5,425,298,361

No. of treasury shares : 450,000

Total number of shares excluding treasury shares : 5,424,848,361

Class of Shares : Ordinary

Voting Rights : One vote per share

Distribution of Shareholdings as at 20 March 2020

Size of Shareholdings

No. of

Shareholders %

No. of

Shares %

1-99 32 0.92 882 0.00

100-1,000 453 13.07 212,435 0.00

1,001-10,000 982 28.34 7,144,029 0.13

10,001-1,000,000 1,964 56.68 152,976,784 2.82

1,000,001 and above 34 0.98 5,264,964,231 97.04

Total 3,465 100.00 5,425,298,361 100.00

Top 20 shareholders as at 20 March 2020

No. Name No. of Shares % of Shares

1 RAFFLES NOMINEES (PTE) LIMITED 1,631,641,961 30.07

2 CITIBANK NOMS SPORE PTE LTD 1,508,292,301 27.80

3 UOB KAY HIAN PTE LTD 1,200,598,892 22.13

4 CGS-CIMB SECURITIES (SINGAPORE) PTE LTD 435,707,000 8.03

5 HSBC (SINGAPORE) NOMINEES PTE LTD 213,754,400 3.94

6 TERRAFIRMA PROPERTY HOLDINGS LTD 102,609,023 1.89

7 DBS NOMINEES PTE LTD 40,836,200 0.75

8 MAYBANK KIM ENG SECURITIES PTE.LTD 22,483,403 0.41

9 OCBC SECURITIES PRIVATE LTD 19,255,129 0.35

10 CIGA ENTERPRISES PTE LTD 18,770,000 0.35

11 PHILLIP SECURITIES PTE LTD 12,315,410 0.23

12 MORGAN STANLEY ASIA (S) SEC PTE LTD 9,878,600 0.18

13 RHB SECURITIES SINGAPORE PTE LTD 8,439,500 0.16

14 UNITED OVERSEAS BANK NOMINEES P L 5,106,352 0.09

15 LIM KEE YEK 3,648,100 0.07

16 PT ELITINDO CITRALESTARI 3,106,688 0.06

17 OCBC NOMINEES SINGAPORE PTE LTD 3,034,100 0.06

18 CHNG BENG HUA 2,300,000 0.04

19 LEE KAI HENG 1,968,000 0.04

20 GOH BEE LAN 1,850,000 0.03

Total: 5,245,595,059 96.69

STATISTICS OF SHAREHOLDINGSAS AT 20 MARCH 2020


Public Float

Based on the information available to the Company as at 20 March 2020 33.66% of the issued ordinary shares of the Company

is held by the public, and therefore, Rule 723 of the Listing Manual issued by the Singapore Exchange Securities Trading

Limited is complied with

Number of Shares

SUBSTANTIAL SHAREHOLDERS Direct Interest Deemed Interest

Parallax Holdings Limited (“PHL”) 2,936,862,151 –

Diamond Mint Limited (“Diamond Mint”)(1) – 2,936,862,151

Dornier Profits Limited (“Dornier“)(2) 189,545,100 467,466,638

Parallax Venture Partners XXX Ltd (“PVP”)(3)(4) – 657,011,738

Salim Wanye (Shanghai) Enterprises Co., Ltd (“Salim Wanye”)(4) – 657,011,738

Success Medal International Limited (“Success Medal”)(4) – 657,011,738

Salim & Van (Shanghai) Investment Ltd (“Salim & Van”)(4) – 657,011,738

Manyip Holdings Limited (“Manyip”)(4) – 657,011,738

Jaslene Limited (“Jaslene”)(4)(5) – 3,593,873,889

Anthoni Salim(6) – 3,596,980,577

Notes:

(1) Diamond Mint has a controlling interest in PHL and is deemed to be interested in the Shares in which PHL has an interest.

(2) Dornier has a deemed interest in 467,466,638 Shares by virture of an agreement pursuant to which Dornier agreed to acquire from PVP such shares.

(3) PVP has a deemed interest in 657,011,738 Shares comprising:

(a) a deemed interest in 467,466,638 Shares held through financial institutions, by virtue of Section 4(3) of the SFA; and

(b) a deemed interest in Dornier’s 189,545,100 Shares, by virtue of Section 4(5) of the SFA.

(4) Salim Wanye has a controlling interest in PVP and is deemed to be interested in the Shares in which PVP has an interest. Success Medal, together with Salim & Van, has a controlling interest in Salim Wanye and is deemed to be interested in the Shares in which PVP has an interest. Each of Jaslene and Salim & Van has an interest in more than 20% of the issued share of the issued share capital of Salim Wanye. Manyip, via its controlling interest in Salim & Van, has an interest in more than 20% of the issued share capital of Salim Wanye. Each of Jaslene, Salim & Van and Manyip is deemed to be interested in the Shares in which PVP has an interest, pursuant to Section 4 of the SFA.

(5) Jaslene has a controlling interest in Diamond Mint and is deemed to be interested in the Shares in which PHL has an interest.

(6) Anthoni Salim has an interest in:

(a) more than 50% of the share capitals of Success Medal and Jaslene. Jaslene and Success Medal in turn have deemed interests in the Shares in which PVP has an interest;

(b) more than 50% of the share capital of Dornier; and

(c) more than 50% of the share capital of PT Elitindo Citralestari.

Anthoni Salim is deemed to have an interest in the Shares in which PVP, Dornier and PT Elitindo Citralestari have an interest.

STATISTICS OF SHAREHOLDINGSAS AT 20 MARCH 2020


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GALLANT VENTURE LTD. 3 HarbourFront Place#16-01 HarbourFront Tower TwoSingapore 099254Tel: (65) 6389 3535 Fax: (65) 6396 7758www.gallantventure.com

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